S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10
S&P 500   4,544.90
DOW   35,677.02
QQQ   374.10

3 Small-Cap Stocks With Big Catalysts

Friday, September 17, 2021 | Thomas Hughes
3 Small-Cap Stocks With Big Catalysts

Buy These Small Caps While They're Still Cheap

As good as a company's fundamentals are it often takes a true catalyst to get a stock's share price moving. Two of many potential catalysts are repurchase announcements and insider buying. Both will result in a decreased share count, both add liquidity to the market, and both are consistent with the idea of rising prices.  After all, who knows better the company's health, outlook, and value better than the insiders themselves. If they are buying shares, it makes sense investors might want to buy some too. 

Zumiez Issues A New Repurchase Program

It was only a week ago that mall-based retailer Zumiez (NASDAQ: ZUMZ) reported earnings and share prices gave evidence of a bottom. The results were a little mixed in regards to the analyst consensus but nonetheless a strong quarter for the company. Tailwinds such as e-commerce, economic reopening, and a normalized back-to-school environment were compounded by a decrease in promotional activity, and all led the company to improve its outlook.  Now that the bottom has been marked, the company compounded the earnings news with a repurchase program worth  $150 million to shareholders. This is worth about 15% of the market cap and is expected to last until fiscal 2022 which ends January 2023. We won’t be surprised if the repurchased allotment gets increased before then. 

Shares of Zumiez are up more than 3.5% in the wake of the news and challenging resistance at a key technical level. Trading at  $40.90 in the pre-market action, Zumiez is on the verge of reversing its downtrend. If price action can move above the 30-day moving average and remain there until the clothes we would consider that a bullish signal. Traders might expect to see some volatility in the near term but price action should turn higher over the mid to long-term.Our targets are $44, $46, and $50.

Three Small-Cap Stocks With Big Catalysts

Calavo Growers Might Be At Bottom, Again

We were no doubt disappointed with Calavo Growers’ (NASDAQ: CVGW) last earnings report but not all the news was bad. While the top and bottom-line results were impacted by near-term headwinds, those headwinds should dissipate over the next quarter or two and the long-term outlook remains bright. Price action in shares of Calavo Growers extended its downtrend to hit a new multi-year low in the wake of the news but the insiders have started scooping up shares. The company’s interim CEO purchased 5,000 shares for a price of $180,600 effectively putting his money where his mouth is. The purchase increases Mr. Hollister’s holdings, who is also on the board of directors, to 28,350 shares. Notably, data from Marketbeat.com shows this is the first insider buy since 2017 despite numerous sales so may very well mark a change in tide for this stock. 

Three Small-Cap Stocks With Big Catalysts

The Dawn Of A New Trend For Tuesday Morning

Shares of Tuesday Morning (OTCMKTS: TUEM) have been a little bit volatile since the IPO but it looks like a new trend is dawning. Price action appears to be putting in a bottom at a higher level than previously after news CEO Fred hand increased his holdings by more than $1 million. The disclosure came in an SEC filing released on Thursday making the fourth Insider buy this week. Price action popped nearly 30% on the news and is edging higher in the aftermarket now making this the strongest catalyst we’ve seen recently. Insiders now hold 5.5% of this stock while institutional money controls another 32%.

It looks like price action is going to bounce higher in the wake of this news but, if nothing else, a new trend has been set. If price action is able to move higher it will probably find resistance near $3.50 which is good for a gain greater than 50%. If not, we would expect to see price action consolidate near the $2 level before making its next move. 

Three Small-Cap Stocks With Big Catalysts

Should you invest $1,000 in Zumiez right now?

Before you consider Zumiez, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Zumiez wasn't on the list.

While Zumiez currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Zumiez (ZUMZ)2.1$41.04-0.4%N/A8.53Hold$45.00
Tuesday Morning (TUEM)1.9$2.25-3.8%N/A-3.04Buy$6.00
Calavo Growers (CVGW)3.2$42.09+1.9%2.73%102.66Buy$76.00
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