Stock picks to buy, small companies with high upside from RBC – Business Insider

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  • A team of RBC analysts focusing on small-company stocks just unveiled an updated list of top picks.
  • Smaller companies usually outperform in a recovering economy, and those stocks have taken off recently.
  • The firm’s highest-upside names are concentrated in two areas that have been hot for most of 2020: Tech and healthcare.
  • Visit Business Insider’s homepage for more stories.

While investors watch the presidential election, the will-they-or-won’t-they stimulus talks on Capitol Hill, and the latest COVID-19 and economic numbers, it would be understandable if other developments slip through the cracks.

In case traders are otherwise occupied, a team of analysts at RBC is filling in by collecting its best US small-company stock ideas as the fourth quarter gets underway. It’s also timely because after the initial stages of the market’s rally were dominated by larger companies, small caps have caught fire recently.

If stocks follow their historic patterns, smaller companies could be the biggest winners as the economy gets back up to speed following the deep recession earlier this year. And RBC says these companies are on track for both long-term success and substantial gains in the short term.

The following seven companies are all rated “outperform” by RBC’s analysts, and they all have market capitalizations of $5 billion or less. They are reasonably heavily traded, as their average daily volumes top the $10 million market. The septet are all 25% away from their 12-month price targets.

All of the stocks hail from either the tech sector, the best-performing part of the market in 2020, or from healthcare, which has received new attention as an investment theme in the wake of the coronavirus pandemic.  

The stocks are ranked in increasing order of price upside implied by RBC’s targets. Percentages were calculated based on Thursday’s closing prices.

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