Market Trends - The market rotation trend is shifting from mega-cap tech stocks towards small caps, cyclicals, and financials, with expectations for this trend to continue due to easy monetary policy from the Fed and upcoming rate cuts [2][3] - Small caps are viewed as undervalued and are expected to outperform as the Fed enters a rate-cutting cycle, supported by fiscal policies and a new tax bill that benefits R&D intensive small caps [2][3] Investment Methodology - A list of small cap stocks was created using stock screeners, focusing on those with high analyst upside potential and hedge fund interest, with data sourced from Insider Monkey's database [6][7] - The methodology aims to identify stocks that hedge funds are investing in, as this strategy has historically outperformed the market [7] Company Highlights UP Fintech Holding Ltd. (NASDAQ:TIGR) - UP Fintech Holding Ltd. has a market cap of $1.54 billion and an analyst upside of 72.79%, with 18 hedge fund holders [8][9] - The company reported a fiscal Q3 revenue of $175.2 million, reflecting a 73.3% year-over-year growth, and a net income of $53.8 million, up 29.9% quarter-over-quarter [12] - Despite strong fiscal results, analysts maintain a cautious outlook due to anticipated rate cuts, slowing client acquisition, and market volatility [10][11] Vericel Corporation (NASDAQ:VCEL) - Vericel Corporation has a market cap of $1.84 billion and an analyst upside of 53.33%, also with 18 hedge fund holders [14] - The company reported fiscal Q3 revenue of $67.5 million, an increase from $57.9 million in the prior year, with net product revenue driven by MACI and Epicel products [15] - Vericel reaffirmed its full-year revenue guidance of $272 to $276 million, with a projected growth rate for MACI in the low 20% range [17]

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Market Performance & Outlook - Equity markets experienced a strong year, with the market up 16% [1] - The market has increased by 80% over the last three years [3] - S&P and Russell 2000 constantly hit new highs [2] - International and emerging market equities are up over 30% year-to-date [2] Portfolio Strategy & Recommendations - Rebalancing portfolios is recommended to address overexposure to benefiting indices [4] - Repositioning portfolios to reduce risk is suggested [4] - Overweighting small caps is favored [5] - International developed and emerging market equities are attractive [5] Small Cap & M&A Activity - The IPO calendar in 2025 doubled that of 2024, and is expected to be even stronger in 2026 [5] - M&A activity has increased, with small cap stocks often being targets [5] International Market Considerations - A significant portion of the 30+% return in international and emerging markets is due to the weakening US dollar [6] - In Europe, the return in US dollar terms is over 30%, while in local currency, it's about half of that [6]

Core Insights - Small-cap stocks are showing signs of recovery, which may indicate a bullish trend as the market approaches 2026 [3][4] - The article discusses four small-cap stocks with dividend yields ranging from 7.1% to 13.3% [5] Small-Cap Market Overview - Small-cap stocks have underperformed compared to larger stocks over the past decade, with a brief rally during the COVID reopening in 2020 [3] - Factors such as rising interest rates and a shift towards safer mega-cap stocks have contributed to the underperformance of small caps [3][4] - The recent focus on potential Federal Reserve rate cuts has led to increased interest in small-cap stocks [3][4] Featured Small-Cap Stocks - **Nuveen Churchill Direct Lending (NCDL)**: Offers a 13.0% dividend yield and is part of the business development companies (BDCs) sector, which is required to distribute at least 90% of earnings as dividends [5][6] - **UWM Holdings (UWMC)**: Provides a 7.1% dividend yield and is the largest home mortgage lender in the U.S., focusing on wholesale lending [11][12] - **Redwood Trust (RWT)**: Has a 12.7% dividend yield and is involved in jumbo residential mortgages and single-family rental loans, with a focus on improving earnings in the coming years [15][16] - **Franklin BSP Realty Trust (FBRT)**: Offers a 13.3% dividend yield and primarily deals in commercial mortgage-backed securities, with a recent acquisition expected to enhance its earnings potential [19][21] Financial Performance and Outlook - NCDL's high yield is supported by regular and supplemental dividends, although the latter have been replaced with a traditional payout schedule [6][10] - UWMC is positioned to benefit from lower mortgage rates, with plans to scale operations as rates decline [12][13] - Redwood Trust has been repurchasing shares and is on "dividend growth watch," indicating potential for future dividend increases [18] - FBRT's recent acquisition of NewPoint Holdings is expected to contribute positively to its distributable earnings, despite concerns over dividend coverage [21][22]

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Core Insights - Congressman Tim Moore has made significant stock purchases in Hyster-Yale Inc, a small cap lift truck company, amid notable market activity and scrutiny [1][4][6] Group 1: Stock Transactions - Moore disclosed purchases of Hyster-Yale shares totaling between $145,000 and $350,000, with the company's market capitalization around $620 million [2] - His previous transactions included buying $80,000 to $200,000 in shares in October and selling between $100,000 and $250,000 later in the month [4] - Recent purchases did not include any sales, but the stock price surged from $28.12 to $35.03 following the news of his transactions [5] Group 2: Company Background - Hyster-Yale has a history of signing government contracts, which raises questions about the implications of Moore's trades [5] - Moore also made a notable purchase of Genprex shares, a clinical stage gene therapy company with a market capitalization of less than $10 million, indicating a trend towards investing in smaller companies [6] Group 3: Market Reaction - The stock of Hyster-Yale experienced a significant increase in value following the announcement of Moore's purchases, highlighting the potential impact of political figures on stock prices [5]

Group 1: Small Cap Stocks Overview - Seven small-cap stocks to watch include Beyond Meat, Spring Valley Acquisition, Strive, SEALSQ, VSee Health, Inflection Point Acquisition Corp. II, and Churchill Capital Corp X [2] - Small-cap stocks are defined as publicly traded companies with market capitalizations generally between $300 million and $2 billion [2] - These stocks are perceived to have higher growth potential but also come with increased volatility, lower liquidity, and greater business risk compared to mid- and large-cap stocks [2] Group 2: Beyond Meat Overview - Beyond Meat, Inc. specializes in developing, manufacturing, marketing, and selling plant-based meat products both in the United States and internationally [3] - The company offers a variety of plant-based meat products across beef, pork, and poultry categories [3] - Products are distributed through various channels including grocery stores, mass merchandisers, club stores, natural retailers, restaurants, foodservice outlets, and schools [3] Group 3: Other Companies Overview - Spring Valley Acquisition is a blank check company formed for the purpose of effecting a merger or similar business combination [7] - Strive (ASST) provides social media marketing and content delivery services across platforms like Discord and TikTok, focusing on community server management and investment education [4] - SEALSQ Corp designs and markets semiconductor chips globally, offering products such as secure elements and identity provisioning services [5]

Core Insights - The S&P 500 and Nasdaq are nearing all-time highs, with many popular stocks and ETFs appearing expensive, particularly mega-cap technology stocks [1] - There are still relatively cheap areas in the market, specifically small-cap stocks and real estate investment trusts (REITs), which may present investment opportunities for long-term investors [2] Small-Cap Stocks - The Vanguard Russell 2000 ETF tracks the performance of the Russell 2000 index, which consists of 2,000 small-cap companies with a median market cap of $3.4 billion [4] - The ETF is highly diversified, with no single stock accounting for more than 0.74% of its assets, making it a suitable option for investors seeking exposure to smaller companies [4] Real Estate Investment Trusts (REITs) - The Vanguard Real Estate ETF invests in an index of REITs that own various types of commercial real estate, including retail properties and data centers [5] - This ETF is more concentrated, with the 10 largest holdings comprising 39% of total assets, indicating that some REITs are significantly larger than the average in the sector [6] - The Vanguard Real Estate ETF is designed as an income investment, offering a yield of nearly 4% through dividends passed from its components [6] Investment Timing - The current valuation gap between small-cap and large-cap stocks, along with a likely falling-rate environment, could favor small-cap stocks and rate-sensitive sectors like real estate [9] - Both the Vanguard Russell 2000 ETF and the Vanguard Real Estate ETF are positioned as attractive entry points for long-term investments [8]

Core Insights - The article discusses the performance of small-cap stocks, particularly those reaching 52-week highs, amidst the current market focus on mega-cap stocks and sectors like artificial intelligence and crypto [1][2]. Small-Cap Stock Analysis - Small-cap stocks can experience significant volatility, which may deter risk-averse investors, necessitating attention to both fundamental and technical signals for successful trading [2][4]. - A stock reaching a new 52-week high is generally viewed as a bullish momentum signal, indicating potential for further gains [3]. Technical Signals and Investment Strategies - Long-term investors should focus on fundamental metrics and future catalysts, while short-term traders may rely on technical tools like moving averages and momentum oscillators [4]. - The article highlights three small-cap stocks that have recently surpassed their 52-week highs, suggesting a closer examination of their performance [5]. Company-Specific Insights Sunrun - Sunrun has seen a revival in its stock price due to the unexpected retention of federal solar tax credits, despite initial fears of their elimination [6][7]. - The stock has received several analyst upgrades, with technical indicators showing a breakout above key moving averages and a favorable Relative Strength Index (RSI) [9]. ACM Research - ACM Research, a semiconductor company, has experienced a significant price increase of over 150% year-to-date, driven by the AI sector's growth [12]. - The stock's chart indicates a potential decline back to its 50-day simple moving average due to an Overbought signal on the RSI [15]. Sonos - Sonos has faced challenges from high tariffs affecting its wireless audio equipment, yet its stock has risen over 50% in the last three months due to bullish momentum [16][17]. - The company is expected to raise prices due to tariff pressures, and the RSI indicates a potential fading momentum, making the 50-day SMA a key support level to watch [19].

CNBC’s “Money Movers” team discusses markets and small cap stocks with Jill Carey Hall, head of U.S. small and mid cap strategy at Bank of America. ...