5 Small-Cap Stocks to Buy Despite Inflation Headwinds

Market Overview - The U.S. stock market has experienced a significant bull run over the past 18 months, with the Dow, S&P 500, and Nasdaq Composite increasing by 4.2%, 17.6%, and 24.8% year to date, respectively [1] - The S&P 400, which focuses on mid-cap stocks, is up 4.2%, while the Russell 2000, representing small-cap stocks, has only gained 0.8%, and the S&P 600 is down 2.3% year to date [1] Small Business Sentiment - High inflation and interest rates continue to impact U.S. small businesses, with 24% of respondents in the CNBC|SurveyMonkey Small Business Survey believing inflation has peaked, down from 29% in the previous quarter [1] - In the second quarter, 75% of respondents expect inflation to rise, an increase from 69% in the previous quarter [2] - Small Business Confidence remains stable at 47% in the second quarter, consistent with the first quarter and slightly above the 46% reported in the same quarter last year [3] - The NFIB Small Business Optimism Index rose to 91.5 in June from 90.5 in May, marking the highest reading this year but still below the 50-year average of 98 [3] Company Highlights - American Axle & Manufacturing Holdings Inc. (AXL): Expected revenue growth of 3.1% and earnings growth of over 100% for the current year, with a 5.3% improvement in earnings estimates over the last 60 days [4][5] - EverQuote Inc. (EVER): Anticipates revenue growth of 33.9% and earnings growth of over 100% for the current year, with a 25% increase in earnings estimates over the last 60 days [5] - The Gorman-Rupp Co. (GRC): Expected revenue growth of 5.9% and earnings growth of 21.2% for the current year, with a 7.1% improvement in earnings estimates over the last 60 days [6] - Root Inc. (ROOT): Projects revenue growth of over 100% and earnings growth of 60.6% for the current year, with a 16.2% increase in earnings estimates over the last 30 days [7] - Enviri Corp. (NVRI): Expected revenue growth of 17.4% and earnings growth of over 100% for the current year, with earnings estimates improving by more than 100% over the last 60 days [8]