Given the continuing low-interest-rate environment and economic recovery, which are favorable for small-cap stocks, we think it could be wise to bet on fundamentally sound small-cap stocks Preformed Line Products (PLPC), Gran Tierra Energy (NYSE:GTE), and Civeo (NYSE:CVEO). These stocks are rated ‘Strong Buy’ in our proprietary rating system. Read on.Although the S&P 500 and Nasdaq ended a choppy session higher yesterday, rising retail sales as the holiday season approaches, declining unemployment, and increasing consumer spending should keep the stock market upbeat in the near term. President Biden’s commitment to monitor inflation and expected earnings growth of more than 20% for Q4 2021 should also support the stock market.
Furthermore, the Federal Reserve has left interest rates at near-zero. Because low-interest rates make access to capital easier for small companies, they benefit in a low-interest-rate environment. The continuing economic recovery should also help small-cap stocks expand their market reach. Investors’ interest in small-cap stocks is evident in the Dow Jones U.S. small-cap total stock market index’s 33.7% returns over the past year.
Therefore, we think it could be wise to bet on small-cap stocks Preformed Line Products Company (PLPC), Gran Tierra Energy Inc. (GTE), and Civeo Corporation (CVEO), which possess strong financials. These stocks are rated ‘Strong Buy’ in our proprietary rating system.