Small-cap companies are expected to grow at a faster rate versus billion-dollar businesses as the economic recovery gains pace. Given this, we think it wise to bet on small-cap companies Winnebago (WGO), La-Z-Boy (LZB), and Hibbett (HIBB) given their immense growth potential. Read on and we’ll explain.During times of economic recovery, small-cap stocks tend to outperform their large-cap counterparts. As the U.S. continues to recover from COVID-19 pandemic economic disruption at a faster-than-expected pace, small-cap companies are preparing to capitalize on the growth opportunities. Also, small- and medium-sized businesses (SMBs) have been receiving substantial government support in the form of tax deferrals and subsidies. The $1.9 trillion pandemic rescue package passed by the Biden administration is expected to boost consumer spending, which should contribute to boosted sales by these companies.
Given this backdrop, the Vanguard Small-Cap ETF (VB) has gained 12.7% and the SPDR S&P 600 Small Cap ETF (SLY) has returned 19.7% so far this year. This compares to a 10.1% rise in the large-cap focused SPDR S&P 500 ETF Trust (SPY).
So, we believe that investors who want to invest in stocks with immense growth potential and can tolerate some market volatility should bet on Winnebago Industries, Inc. (NYSE:WGO), La-Z-Boy Incorporated (LZB), and Hibbett Sports , Inc. (NASDAQ:HIBB).