Small-cap stocks are expected to grow at a faster clip than billion-dollar businesses as the economic recovery gains pace. As such, we think it is wise to bet on small-cap companies PRGX Global (NASDAQ:PRGX), Core Molding (CMT), and Evolving Systems (EVOL).They have immense growth potential. Read on.During times of economic recovery, small-cap stocks tend to outperform their large-cap counterparts. So, as the United States’ economic recovery gains steam, small cap stocks have, not surprisingly, been making a solid comeback on the back of rising consumer spending and easy access to capital. Also, several small- and medium-sized businesses (SMBs) have been receiving substantial government support in the form of tax deferrals and subsidies. And the $1,400 recovery checks that have been awarded by the government to millions of U.S. households are driving an increase in consumer spending and a consequent increase in demand for these companies’ products and services.
Investors’ growing interest in the small-cap stocks is evident in the Vanguard Small-Cap Index Fund ETF’s (VB) 13.7% gains and the SPDR S&P 600 Small Cap ETF’s (SLY) close to 21% returns so far this year. These returns compare to the 11.2% gains of the large-cap focused SPDR S&P 500 ETF Trust (SPY).
So, investors that are seeking to capitalize on the economic recovery and have higher-than-average risk appetites should invest in PRGX Global, Inc. (PRGX), Core Molding Technologies, Inc. (CMT), and Evolving Systems, Inc. (EVOL). We think their strong financials and growth prospects should help these small-cap stocks advance in the coming months.