Small Cap Summer: 3 Top Ranked Stocks to Buy Now

Core Viewpoint - The Russell 2000 Small-Cap Index has underperformed compared to the broader market, but there are expectations for a potential convergence in performance due to upcoming interest rate cuts and seasonal factors [1][2]. Small-Cap Stocks Catalysts - Elevated interest rates have negatively impacted small-cap stocks, but anticipated interest rate cuts before year-end could provide a boost [2]. - Seasonal trends indicate that from mid-May to the end of June, the Russell 2000 typically outperforms the S&P 500 [2]. - Notable hedge fund manager Stanley Druckenmiller has increased his position in small-cap stocks, indicating confidence in this sector [2][16]. Company Highlights MoneyLion (ML) - MoneyLion is a financial technology company that offers a range of financial products through its mobile app, including banking, lending, and investment services [4]. - The company reported record revenue of $121 million, a 29% year-over-year increase, and expanded margins by 480 basis points, with total customers growing to 15.5 million, a 98% increase year-over-year [4][5]. - Analysts have raised earnings estimates significantly, with a 2,500% increase in this year's earnings estimate over the last month, and the stock is trading at 18 times FY25 earnings [5][7]. PubMatic (PUBM) - PubMatic is a digital advertising technology company that provides a cloud-based platform for publishers to optimize ad revenue through programmatic advertising [8]. - The company has seen strong sales growth in the teens and profit growth driven by improving business fundamentals [8]. - Analysts have upgraded FY24 earnings estimates by 41% and FY25 estimates by 34%, giving it a Zacks Rank 1 (Strong Buy) rating [9]. Universal Technical Institute (UTI) - UTI is a provider of post-secondary education focused on technical training for various industries, operating campuses across the US [11][12]. - The company has seen steady increases in earnings estimates and holds a Zacks Rank 2 (Buy) rating, with expectations to beat next quarter's earnings estimates by 13.8% [12]. - UTI's stock is up 25% year-to-date and is trading at a forward earnings multiple of 21.5 times, below its 10-year median of 29.2 times [11][13].