7 Excellent Small-Cap Stocks to Buy Before This Year Ends

Stocks to buy

If you’re an investor, you can’t afford to overlook small-cap stocks to buy.

Small-cap stocks don’t get the same kind of publicity as their mega-cap siblings. They aren’t going to lead a segment on CNBC or the home page of the Wall Street Journal on a daily basis. With market capitalizations ranging from around $300 million to $2 billion, small-cap stocks tend to fly under the radar.

But some of these are solid companies and excellent small-cap stocks to buy. They can inflate your portfolio just as well as a mega-cap – a 15% return in a small-cap stock is just as good as a 15% return anywhere else, right?

Because these seven small-cap stocks to buy are not as well-known, you have a greater opportunity to find those that may be underappreciated. That’s where the Portfolio Grader comes in – my exclusive free tool that evaluates stocks with a letter grade, based on both buying momentum and qualitative metrics.

ENPH Enphase Energy $299.34
ACLS Axcelis Technologies $61.39
AMN Healthcare $126.01
AOSL Alpha and Omega Semiconductor $32.29
ARLP Alliance Resource Partners $23.96
ASIX AdvanSix $35.73
ATKR Atkore $94.20

Enphase Energy (ENPH)

Source: IgorGolovniov / Shutterstock.com

Enphase Energy (NASDAQ:ENPH) makes solar energy inverters and battery storage products. Customers can install the company’s microinverters on their homes, store gathered power on a battery and use it to power their homes during a service interruption.

A smartphone app allows customers to see how much power they have stored, and direct power to essential appliances when a grid outage occurs.

So far this year, Wall Street is a big fan. Even though the greater stock market is in the red, ENPH stock is up nearly 30% on the year, and it still appears to have more room to go. Analysts have a consensus price target of $310, which gives ENPH stock another 7% of projected growth.

Enphase also consistently beats expectations with its quarterly earnings reports, and Q3 was no different. Revenue of $634.71 million topped expectations of $615.85 million; earnings per share of $1.25 was better than expectation of $1.09, making this one of the small-cap stocks to buy on continued growth expectations.

ENPH stock appears to have a bright future, and has an “A” rating in the Portfolio Grader.

Axcelis Technologies (ACLS)

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Axcelis Technologies (NASDAQ:ACLS) hasn’t fared so well, but that’s to be expected considering that tech stocks in general are having a bad year. So far in 2022, ACLS stock is down by 23%, but I’m not worried.

Axcelis makes and sells next-generation Purion platforms with ion implanter technology that’s used to make semiconductors. The Purion platform helps semiconductor companies optimize their yields and reduce glitches in production.

Semiconductors have been in the news all year as a combination of Covid shutdowns, a huge demand for gaming consoles and other electronics and supply chain disruptions combined to create a huge shortage in semiconductors over the last year. While that shortage is starting to ease, it’s clear that the demand for semiconductors – and companies like Axcelis – will continue to be high.

Earnings for the second quarter topped expectations on top and bottom lines. Revenue was $221.18 million, beating expectations of $214.36 million. EPS of $1.32 was better than expectations of $1.04 per share.

ACLS will report Q3 earnings on Nov. 3. The stock has an “A” rating in my Portfolio Grader.

AMN Healthcare (AMN)

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With baby boomers entering their twilight years and Generation X graying rapidly, the need for health care is greater than ever. AMN Healthcare (NYSE:AMN) is a leading provider of nursing staffing services for hospitals and healthcare facilities.

With more than 500 clients, AMN provides travel nurses, rapid response healthcare, staffing for schools and internationally. Those services look to be in demand. AMN estimates that a half million registered nurses will retire by the end of this year. It also estimates that there will be a shortage of 139,000 doctors in the U.S. by 2033.

Business so far is good: revenue for Q2 was $1.43 billion, beating expectations for $1.37 million. EPS of $3.31 beat expectations of $2.99 per share.

AMN is roughly flat for the year, but reports Q3 earnings on Nov. 3. It has an “A” rating in the Portfolio Grader.

Alpha and Omega Semiconductor (AOSL)

Source: Shutterstock

Alpha and Omega Semiconductor (NASDAQ:AOSL) makes products that are used in flat-panel TVs, LED lighting, smartphones, battery packs, computer equipment and telecommunications equipment.

Its most recent product, a smart motor module that is purportedly the smallest in the industry, powers PC and server fans, seat cooling and home appliances.

So far this year, the stock is down 47% but it appears ripe for a turnaround as the company plans to report fiscal Q1 2023 earnings on Nov. 3. The company has been a consistent winner with its last few earnings reports, including a Q4 report with top- and bottom-line beats of $194.96 million and earnings of 95 cents per share.

AOSL stock has a “B” rating in the Portfolio Grader.

Alliance Resource Partners (ARLP)

Source: Pavel Kapysh / Shutterstock.com

There are two reasons to like Alliance Resource Partners (NASDAQ:ARLP) as a great small-cap stock.

First is its position in coal – ARLP is a top coal producers in the eastern U.S. Coal is still an important source of energy for millions of people, even as the nation begins is slow shift to alternative and cleaner energy sources.

High coal prices are driving the company’s revenue and profit margins. Alliance announced that it sold 9.185 million tons of coal in the quarter ending Sept. 30 at an average price of $59.94, compared to a year ago when it sold 8.494 million tons at an average price of just $42.65 per ton.

But this is no one-trick pony. Alliance is also working to diversify its business by investing in EV charging station company Francis as well as electric motor manufacturer Infinitum Electric.

The master limited partnership’s stock is up 90% so far in 2022, and it has an “A” rating in the Portfolio Grader.

AdvanSix (ASIX)

Source: Pavel Kapysh / Shutterstock.com

You may not be aware of AdvanSix (NYSE:ASIX), but don’t be surprised if you’ve benefited from one of its products. The chemical manufacturer produces nylon resin, which is used in products ranging from carpeting to food packaging to plastics and paint products.

AdvanSix is also the world’s biggest single-site producer of ammonium sulfate fertilizer, which is a good place to invest considering that the Earth holds 8 billion people and needs strong crop yields to feed them.

Earnings for the second quarter were a mixed bag, with revenue of $583.74 million beating expectations of $557.5 million, but EPS of $2.30 falling nine cents short of analysts’ estimates.

Wall Street will be looking for a little better when AdvanSix reports third-quarter earnings on Nov. 4. For now, it has a “B” rating in the Portfolio Grader.

Atkore (ATKR)

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Atkore (NYSE:ATKR) manufactures and sells an assortment of electrical and mechanical products – things like cable management, conduit, PVC and metal tubes, cable systems, razor wire and safety products.

And the company is expanding. It completed a total of six acquisitions to expand its footprint in 2022 with deals totaling $310 million.

Atkore stock is down 16% so far this year, but it’s making a late charge, rising by 20% just over the last month. Quarterly earnings are also helping to boost the stock’s Portfolio Grader rating, as the company consistently tops expectations in both revenue and EPS. In the third quarter, revenue of $1.06 million was better than the $1.01 billion Wall Street expected, and EPS of $6.07 beat expectations of $5.22 per share.

Atkore stock has a “B” rating in the Portfolio Grader.

On the date of publication, Louis Navellier has positions in ENPH, ACLS, AMN, AOSL, ARLP, ASIX and ATKR. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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