3 Small-Caps to Buy for Big Growth
Various investment styles exist, with some investors opting for income-generating assets, while others focus on value or specific industries.
Of course, some investors prefer a less-conservative approach, such as small-cap stocks, which sport remarkable growth potential due to being in their early stages.
And as of late, small-caps have enjoyed buying pressure, a welcomed development among market participants as we wade through a unique economic situation.
Interestingly enough, three small-caps – BJ’s Restaurants BJRI, Tsakos Energy Navigation TNP, and Blue Bird BLBD – all sport improved earnings outlooks.
In addition, all three sport impressive growth trajectories, making them enticing for those with a growth-focused mindset. Let’s take a closer look at each.
BJ’s Restaurants
BJ's Restaurants, a current Zacks Rank #1 (Strong Buy), owns and operates a chain of high-end casual dining restaurants in the U.S. Analysts have taken their earnings expectations higher across nearly all timeframes.
The company has recently shown consistency within its quarterly results, exceeding both earnings and revenue expectations in three consecutive quarters. BJRI surprised in a big way in its latest release, exceeding the Zacks Consensus EPS estimate by 275% and sales expectations by 3%.
BJRI’s revenue has recovered nicely from pandemic lows, as we can see in the chart below.
Image Source: Zacks Investment Research
The company’s forecasted growth is hard to ignore, with estimates calling for 320% EPS growth in its current fiscal year (FY23) and an additional 64% in FY24. The stock sports a Style Score of “B” for Growth.
Image Source: Zacks Investment Research
Keep an eye out for BJRI’s upcoming quarterly release on July 20th; the Zacks Consensus EPS estimate of $0.33 suggests a 230% jump in earnings, with the quarterly estimate being revised 3% higher over the last several months.
Tsakos Energy Navigation
Tsakos Energy Navigation, a Zacks Rank #2 (Buy), is a leading provider of international seaborne crude oil and petroleum product transportation services. The company has enjoyed positive earnings estimate revisions nearly across the board, with the trend particularly noteworthy for its upcoming quarterly release.
Image Source: Zacks Investment Research
In addition, TNP shares could interest income-focused investors; shares currently yield a solid 3.3% annually with a sustainable payout ratio sitting at 3% of the company’s earnings.
Image Source: Zacks Investment Research
Shares aren’t stretched regarding valuation given the company’s forecasted growth, with the current 1.9X forward earnings multiple sitting in line with the five-year median. Impressively, the company is forecasted to post 56% EPS growth on 21% higher revenues in its current fiscal year (FY23).
Blue Bird
Blue Bird, a Zacks Rank #2 (Buy), is engaged in the designing, engineering, manufacturing, and sale of school buses and related parts. Analysts have taken their earnings expectations higher for the company’s current and next fiscal year over the last several months.
Image Source: Zacks Investment Research
Blue Bird bounced back in its latest release, exceeding the Zacks Consensus EPS estimate by a sizable 170% and delivering a 25% revenue surprise. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Like BJRI, keep an eye out for the company’s next quarterly release on August 9th, as the Zacks Consensus Estimate of $0.26 per share suggests nearly 400% EPS growth from the year-ago quarter.
And to top it off, the company sports a rock-solid growth trajectory, forecasted to witness 150% EPS growth in its current fiscal year (FY23) and an additional 165% in FY24. Revenue growth is also apparent, forecasted to climb 40% in FY23 and a further 10% in FY24.
Bottom Line
For those who can handle a higher level of volatility and have a less conservative approach, small-cap stocks could be solid considerations.
While their price swings can undoubtedly become spooky, their growth potential is impressive.
And all three above – BJ’s Restaurants BJRI, Tsakos Energy Navigation TNP, and Blue Bird BLBD – boast strong growth trajectories paired with improved earnings outlooks.
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BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report
Tsakos Energy Navigation Ltd (TNP) : Free Stock Analysis Report
Blue Bird Corporation (BLBD) : Free Stock Analysis Report
