Stocks, bonds, ETFs, straight out of downtown Chicago. This is Zach's Market Edge. Welcome to Zach's Market Edge, the podcast about investing in your life.I'm your host, Tracy Reinick, and this week I have a guest. As promised, Zach's small cap analyst, Mark Zinski, is back on the podcast, and he's bringing us those small cap stocks. Now remember the difference between Mark and myself.Mark is actually an analyst. I'm just a strategist. So I look at the bigger picture.Mark is actually looking at these compan ...

Small cap stocks, typically defined as companies with market capitalizations between 300 million and $2 billion, are trading at extreme valuation discounts relative to large cap peers as of early 2026. Metrics like forward price to earnings ratio show small caps at around 20 to 30% gap compared to the S&P 500. That's among the widest in decades.To some degree, small caps are cheap for a reason. These companies are often younger, more volatile, and less stable than large caps with higher exposure to economic ...

Economic Indicators - The delayed JOLTS report and jobless claims indicate a complex labor market situation, with layoffs concentrated in specific companies like Amazon and UPS, suggesting potential underlying issues in hiring and firing trends [3][4] - The ISM manufacturing index showed a significant improvement, moving from the high 40s to the low 50s, indicating a shift from contraction to expansion, although elevated prices paid remain a concern [7][8] Market Trends - There is a noticeable rotation in market momentum, with traditional cyclicals such as energy, industrials, and materials performing well, while tech stocks face sell-offs due to concerns over AI's impact on business models [16][19] - The divergence in earnings growth between large-cap tech companies and smaller-cap stocks suggests a broader market strength, with small-cap earnings showing stability and upward trajectory [19] AI and Technology Sector - The conversation around AI's impact on labor needs and productivity is evolving, with companies reassessing their workforce requirements in light of AI advancements [12][13] - The tech sector is experiencing a sell-off as investors react to aggressive spending plans from major players like Microsoft and Alphabet, leading to a cautious market sentiment [11][14]

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

Well, tech earnings set to kick off this week. Investor focus seems to be broadening beyond the big cap names. The Russell 2000 has been outperforming the S&P 500 over the last six months, driven by valuations and rate cut expectations.Our next guest thinks this trend will continue. Joining us now is Northwestern Mutual Wealth Management Chief Portfolio Manager Matt Stucky. Matt, great to have you with us.>> Thanks for having me. >> So, you're you're into the Russell 2000 move. You think this is durable.Wel ...

AND THEN APPLE ON THURSDAY. ALSO KEY CONSUMER RETAIL WITH THE LIKES OF STARBUCKS, VISA AND AMERICAN EXPRESS AMONGST OTHERS. WE'RE ALSO GOING TO GET THE FIRST FOMC MEETING OF THE YEAR, WHERE RATES ARE EXPECTED TO REMAIN STEADY AND UNCHANGED.SO JOINING US NOW TO PREVIEW THE MASSIVE WEEK AHEAD IS APOLLO CHIEF ECONOMIST THE PREVIOUSLY MENTIONED TORSTEN SLOK. TORSTEN, THANK YOU VERY MUCH FOR JOINING US ON THIS FRIDAY AFTERNOON. WITH ALL THE CATALYSTS I JUST MENTIONED, WHAT DO YOU THINK IS GOING TO BE THE ONE, 2 ...

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]

Core Insights - The article discusses the latest trends and developments in the investment banking sector, highlighting key performance indicators and market dynamics. Group 1: Industry Trends - Investment banking is experiencing a shift towards digital transformation, with firms increasingly adopting technology to enhance efficiency and client engagement [1] - The demand for advisory services in mergers and acquisitions (M&A) has seen a significant uptick, driven by a resurgence in corporate activity [1] - Regulatory changes are impacting the operational landscape, necessitating firms to adapt their compliance strategies [1] Group 2: Company Performance - Major investment banks reported a collective revenue increase of 15% year-over-year, attributed to higher deal volumes and improved market conditions [1] - Cost management remains a priority, with firms implementing measures to streamline operations and reduce overhead [1] - The competitive landscape is intensifying, with boutique firms gaining market share by offering specialized services [1]

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]