Top small-cap plays for 2026

Group 1: Market Trends and Stock Performance - Companies are benefiting from low feedstock prices and high demand for gasoline and distillates, leading to a wide crack spread that has allowed Wall Street firms to raise earnings expectations for the upcoming quarters [2] - Valero is highlighted as one of the best stocks expected to see earnings and sales acceleration in 2026 [1] - Dollar General's stock is up 39% year-to-date despite challenges faced by low-end consumers, indicating a better-than-expected performance [8] Group 2: Sector Insights - The life sciences sector is experiencing strong earnings and revenue growth due to increased capital investment in research, with several companies building positive momentum [5] - The industrial sector is anticipated to see more capital expenditures, with well-managed companies like Textron being recognized for their performance [4] - The electronic components industry is noted for steady earnings, with a focus on cyclical performance compared to larger-cap names [3] Group 3: Consumer Behavior - The low-end consumer is struggling due to inflation and rising gas prices, which is impacting companies like Dollar Tree and Dollar General, despite some stock performance improvements [7][9] - Same-store sales for low-end retailers remain muted, indicating ongoing challenges in the consumer market [9]