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The DOW has its biggest drop since October as COVID variant fears stunt markets worldwide.
All the market indices ended the trading session today in the red.
The delta variant renewed COVID fears and drove the market down today. The DOW Jones, for example, hasn’t dropped this far since October. The bearish sentiment was worldwide, withmarkets across the globe registering losses to kick off the week. Transportation and energy stocks dipped, with the devastating shutdowns still going on. It’s not a huge surprise to see a pullback today.
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Small cap companies with strong operations that you should consider for your long-term portfolio.
This weekend, I got inspired by a Twitter thread where quite a few experienced investors shared small-cap stock ideas to own for the next 10 years.
Some ideas from that thread that grabbed my attention were Fathom Holdings (FTHM),
Vinci Partners (VINP), and Dermtech (DMTK). All interesting companies, especially Dermtech.
The thread inspired me to create a watchlist on Stock Card for small cap companies worth buying now. We can call them small hidden gems to buy now.
Before jumping into two of my favorite stocks from the new watchlist, here's how I created it:
On the screener page, I added a new filter and plugged in these criteria: Small cap, $500 million to $2 billion, Growing market, Growing sales, and No cash concerns. I also focused on NYSE and NASDAQ exchanges to reduce the size of the watchlist. The result is a watchlist of hidden gem stock to buy now.
You can take a look at my watchlist by clicking here!
HIDDEM GEM #1
MGP Ingredients (MGPI) has built growing operations with strong fundamentals.
One of the more intriguing tickers on the hidden gems watchlist is MGP Ingredients (MGPI). MGP earns most of its revenue from distillery operations. This includes the production and sales of industrial alcohol spirits, for food or otherwise. MGPI also operates warehouses for the company itself, and storage services. Apart from this, it also supplies wheat and starch ingredients. We came across this stock once already when we created the Plant-based food watchlist. So, not only is it benefiting from plant-based trends, it also meets criteria for potential small caps to buy now.
Let’s head to its Stock Card for more info. Off the bat, I can see that its financials are looking great. It has green ratings for every aspect of its operations! This includes Sales Growth, Profitability, Cash Availability, and Management Effectiveness. If you click into any of these sections, the sections are broken down further. Here, it’s still green everywhere. The only exceptions are 3-year compounded growth rate and Quarterly Profit Margin, which are both sitting at fair levels. MGP Ingredients has established solid growth that is setting them up well for the future.
In terms of market performance, there were better stocks to have been holding the past 5 years or so, but MGP Ingredients blew the S&P out of the water over the last 10 year period. The agricultural inputs and plant-based food sectors are expecting to see plenty of growth in the coming years. Judging by the factors we just saw on its Stock Card, I’m feeling optimistic about MGPI. Add it to your watchlist to research it more.
HIDDEN GEM #2
TechTarget Inc (TTGT) is capitalizing on a growing Internet Content & Information industry.
The second stock I’m covering today from the new watchlist is TechTarget Inc (TTGT). TechTarget is an experienced company that uses browsing data to help companies promote content that influences potential IT buyers and customers. It serves tech businesses to refine marketing and sales pipelines. Its business model is to charge IT and tech sales teams to get access to better and more qualified IT buyers.
Let’s head to the Stock Card. On its “Growth Potential” rating, the Communications Services sector isn’t expected to have much growth, but there is a very optimistic outlook on the Internet Content & Information industry.
A possible concern with the stock is its current valuation. The share price has risen 751% in the past five years, partly to blame for the “Overvalued stock” rating it holds on the company’s Stock Card.
Despite this, TechTarget is on the new watch list for a reason. The company is doing great in an industry that is growing with each passing day. I recommend you have a look at it when you log in back to your Stock Card account.
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