The Zacks Analyst Blog Highlights Ambac, Pangaea Logistics Solutions, MoneyLion, OppFi and Carrols Restaurant Group
For Immediate Release
Chicago, IL – November 20, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ambac AMBC, Pangaea Logistics Solutions PANL, MoneyLion ML, OppFi OPFI and Carrols Restaurant Group TAST.
Here are highlights from Friday’s Analyst Blog:
Buy These 5 Small-Cap Stocks to Tap Year-End Rally
Wall Street has seen a surge in small-cap stocks, with the iShares Russell 2000 ETF climbing more than 4% in the past five days. This rally coincides with cooling inflation data for the month of October. Experts believe that it may mark the start of a fourth-quarter rally for small-cap stocks, barring some occasional dips.
Let's find out the factors behind this rally, what it means for investors as well as the outlook for 2024. Notably, in this light, investors can bet on top-ranked small-cap stocks.
Small-Cap Rally in the Cards?
Eric Green, CIO of Penn Capital Management, suggests that this rally has been long overdue (as quoted on Yahoo Finance), given the prolonged outperformance of large-cap stocks. Valuations for small-cap companies have become compressed relative to their larger counterparts, making them an attractive buy.
A Less-Hawkish Fed
The latest employment report and the Consumer Price Index data both indicate that inflation is on the decline. This may lead to a less-hawkish Fed in the near term. Following the release of this data, market indicators showed about a 95% probability that the Federal Reserve would keep interest rates unchanged in December, as reflected by data from the CME Group.
Upbeat Holiday Season Sales in the Cards?
The National Retail Federation (NRF) stated that consumers are estimated to shell out between $957.3 billion to $966.6 billion during November and December. Thus, spending will increase between 3% and 4% over the same period last year. The growth may be slightly less than in recent years, but it's still in line with the growth rate from 2010 to 2019, when the average annual holiday outlays jumped 3.6%. Now, lower inflation can boost investor confidence and drive growth in this sector.
Will M&A Activities Pick Up in Small-Cap Space?
Apart from reduced inflation, other factors may add to the rally in small-cap stocks. Per strategists, seasonality tends to benefit small caps toward the end of the year. Additionally, the valuation gap between large and small-cap companies, as well as private and public markets, suggests that mergers and acquisitions (M&A) may pick up. Companies may find it more attractive to acquire smaller, faster-growing firms, taking advantage of the valuation mismatch.
Upbeat 2024 Outlook for Small Caps?
For 2024, Eric Green points out that small caps have priced in a likely recession. In contrast, large-cap stocks have not priced in the possibility of a recession. This pricing mismatch indicates that small-cap stocks may be primed for a rally next year.
Top-Ranked Stocks to Buy
Against this backdrop, we highlight a few small-cap stocks that have Zacks Rank #1 (Strong Buy) or 2 (Buy). The Zacks Consensus Estimate for their earnings in the upcoming fiscal year has grown by at least 10% in the past one month. Moreover, these stocks have jumped more than 10% in the past week. You can see the complete list of today's Zacks #1 Rank stocks here.
Ambac
Ambac Financial Group, Inc. is a holding company that provides financial guarantees and other financial services to clients in both the public and private sectors globally, through its subsidiaries. The stock has a Zacks Rank #1.
Market Cap: $671.1 million
Percentage change F1 Zacks Consensus Earnings Estimate (4 weeks): 550%
One-Week Price Change: 10.82%
Pangaea Logistics Solutions
Zacks Rank #1 Pangaea Logistics Solutionsoperates as a global logistics company. It provides seaborne dry-bulk transportation services.
Market Cap: $328.98 million
Percentage change F1 Zacks Consensus Earnings Estimate (4 weeks): 74.5%
One-Week Price Change: 20.0%
MoneyLion
The Zacks Rank #2 company is a data-driven, digital financial platform. It offers mobile banking and financial membership to take control of their finances.
Market Cap: $282.16 million
Percentage change F1 Zacks Consensus Earnings Estimate (4 weeks): 12.74%
One-Week Price Change: 22.45%
OppFi
Zacks Rank #1 Opportunity Financial LLC provides a financial technology platform that powers banks to help everyday consumers gain access to credit.
Market Cap: $308.77 million
Percentage change F1 Zacks Consensus Earnings Estimate (4 weeks): 26.32%
One-Week Price Change: 13.41%
Carrols Restaurant Group
Zacks Rank #1 Carrols Restaurant Group is the largest BURGER KING franchisee in the United States, with over 800 restaurants.
Market Cap: $402.73 million
Percentage change F1 Zacks Consensus Earnings Estimate (4 weeks): 13.51%
One-Week Price Change: 18.81%
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Carrols Restaurant Group, Inc. (TAST) : Free Stock Analysis Report
Ambac Financial Group, Inc. (AMBC) : Free Stock Analysis Report
MoneyLion Inc. (ML) : Free Stock Analysis Report
Pangaea Logistics Solutions Ltd. (PANL) : Free Stock Analysis Report
OppFi Inc. (OPFI) : Free Stock Analysis Report
