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7 Hot Small-Cap Stocks to Buy in September

In general, finding small-cap stocks to buy can be somewhat fraught. These are stocks with market capitalizations between roughly $300 million and $2 billion. They also tend to be riskier than large-cap names.

Revenue and profits of small-cap stocks tend to be much lower than those of their large-cap peers, while the small caps’ debt-revenue ratios tend to be higher.

As a result, small-cap companies are more likely to go bankrupt, but there still are small-cap stocks to buy that can really run.

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It’s much easier to make huge profits with small-cap stocks than with large-cap ones, and history shows that the best small-cap stocks to buy can indeed make huge fortunes for investors.

For example, Amazon (NASDAQ:AMZN), Tesla (NASDAQ:TSLA) and ServiceNow (NYSE:NOW) were once small-cap stocks.

And some professional money managers who believe in “momentum investing” would say that the best small-cap stocks to buy are those whose values have been climbing in recent weeks. That increases the chances of making a great deal of money in the market.

That said, consider these seven small-cap stocks to buy as we enter September.

ZYXI

Zynex 

$8.92

YTRA

Yatra Online

$2.76

TSRI

TSR 

$7.95

APM

Aptorum’s 

$1.47

JOB

GEE 

$0.72

VTVT

vTv Therapeutics

$1.04

ZAIRF

Zinc8 

$0.24

Zynex (ZYXI)

An image of medical icons in a web; DNA, bandage, eye, lungs, heart, syringe
An image of medical icons in a web; DNA, bandage, eye, lungs, heart, syringe

Source: ArtemisDiana/Shutterstock

Zynex (NASDAQ:ZYXI) sells its own medical devices and those of other companies. Many of the products that Zynex sells are pain-relievers.  Its leading product –NextWave — uses electrical currents to relieve pain.

Given increased fears of opioid addiction, the demand for Zynex’s pain-relieving products is likely to be very strong. The company’s orders reached record levels in Q2, as its orders increased 19% quarter over quarter and 10% year over year, and the company preliminarily reported that its sales had jumped 18% year over year in Q2.

For the full year, Zynex expects its EBITDA, excluding certain items, to come in between $25 million and $35 million. Zynex’s forward price-earnings ratio is a reasonable 21.5, making in one of the better small-cap stocks to buy right now.

Yatra Online (YTRA)

a map of an ocean surrounded by beach leisure items to represent travel stocks
a map of an ocean surrounded by beach leisure items to represent travel stocks

Source: Shutterstock

As in the U.S., India is experiencing a huge travel rebound as fears of the coronavirus subside and as lockdowns are terminated.

Indian online travel agency Yatra Online (NASDAQ:YTRA) is clearly benefiting from that trend.

Yatra’s revenue jumped 141% year-over-year in the second quarter to $15.9 million, excluding certain items. Its adjusted EBITDA in Q2 came in at $1.6 million.

The shares are trading at a very attractive forward price-sales ratio of just 1.7 ($173 million market cap/$106 million analysts’ mean estimate for next year).

TSR (TSRI)

Group of colleagues discuss something in an office conference room.
Group of colleagues discuss something in an office conference room.

Source: GaudiLab / Shutterstock

TSR (NASDAQ:TSRI) should be reporting very strong financial results in the current macro environment. The U.S. labor market remains tight while many IT companies are still generating huge profits. Those IT firms are more likely than in past years to use recruiters like TSR and to pay them high commissions.

For its fiscal Q4 that ended in May, TSR’s sales jumped 24% to a record $26.2 million, while its EPS came in at 15 cents, versus a per-share loss of 2 cents during the same period a year earlier. For the full fiscal year, TSR’s EPS jumped to $3.30, versus a per share loss of 31 cents during the previous year.

The stock has climbed 12% in the last three months, and its P/E ratio is a tiny 2.4. With the IT labor market likely to remain very tight for a long time, TSR stock is one of the better small-cap stocks worth considering.

Aptorum (APM)

A magnifying glass zooms in on the website for Aptorum Group (APM).
A magnifying glass zooms in on the website for Aptorum Group (APM).

Source: Pavel Kapysh / Shutterstock.com

In January, the FDA granted orphan drug designation to Aptorum’s (NASDAQ:APM) SACT-1 cancer treatment, as InvestorPlace writer Joel Baglole reported.

A recent clinical trial indicated that the drug does not adversely affect electrical currents in the heart. The Phase 1 clinical data also suggested that any QT interval after oral administration of SACT-1 at 150 mg was well within clinically acceptable limits.

Despite the recent slump of stocks, Aptorum has climbed 4% in August. Moreover, the shares have jumped 53% since May.

These gains indicate that the Street is very excited about SACT-1 . That, in turn, suggests that APT stock may continue to climb going further and that the drug could become a big moneymaker for the company. Indeed, orphan drugs are often very lucrative for pharmaceutical firms.

GEE Group (JOB)

cash and a pen lay atop a paper with graphs and tables
cash and a pen lay atop a paper with graphs and tables

Source: Shutterstock

Rrecruiting company GEE (NYSE:JOB) focuses on placing skilled professionals in positions. In addition to IT workers, Gee also recruits across the white-collar spectrum.

Gee should continue to benefit from the tight labor market for some time, as more companies that have difficulty hiring skilled employees turn to recruiters.

In its fiscal Q3 that ended in June, Gee’s operating income came in at $3.2 million, up from $1.8 million during the same period a year earlier. And the firm’s revenue increased to $41.1 million from $38.1 million during the same period a year earlier.

In the last month, JOB stock has soared 30%, while its P/E ratio is a tiny 3.56 making it among the more attractive small-cap stocks out there.

vTv Therapeutics (VTVT)

Modern Medical Research Laboratory: Two Scientists Wearing Face Masks use Microscope, Analyse Sample in Petri Dish, Talk. Advanced Scientific Lab for Medicine, Biotechnology. Blue Color. KZR stock.
Modern Medical Research Laboratory: Two Scientists Wearing Face Masks use Microscope, Analyse Sample in Petri Dish, Talk. Advanced Scientific Lab for Medicine, Biotechnology. Blue Color. KZR stock.

Source: Gorodenkoff / Shutterstock.com

vTv Therapeutics (NASDAQ:VTVT) has a diabetes treatment, TTP399, that’s getting a lot of attention.

In May, G42 Healthcare agreed to purchase $25 million of VTVT for about $2.41 per share, well above the stock’s current level of $1.

What’s more, last month, another investment company, CinPax, agreed to acquire $10 million in VTVT stock for $2.41 per share. CinRx also obtained a warrant to buy another 1.2 million shares for about 72 cents per share. The warrants will become exercisable upon agreed vesting triggers.

vTv intends to begin two Phase 3 studies of its drug next quarter. In the last three months, VTVT stock has shot up 47%.

Zinc8 (ZAIRF)

energy stocks to buy: two light bulbs with grey sky in the background
energy stocks to buy: two light bulbs with grey sky in the background

Source: Shutterstock

Zinc8 (OTC:ZAIRF) is developing an energy storage system to store energy significantly longer than lithium-ion batteries and is much cheaper.

Based on Zinc8’s recently released Q2 earnings press release, it appears that the system met all of an unnamed cloud service provider’s requirements, including demonstrating discharges of 6+ hours.

It sounds as though Zinc8’s system passed its test with flying colors and that the cloud service provider remains quite interested in using the system.

Zinc8 is looking to build a factory in Ulster, N.Y. and has received support for that initiative from the Senate Majority Leader, Charles Schumer. Given Schumer’s support for the firm, I think it’s likely that Zinc8 will benefit from the Democrats’ climate bill.

ZAIRF stock has soared 50% in the last three months.

On the date of publication, Larry Ramer held long positions in VTVT and ZAIRF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

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