Top 5 small-cap stocks to buy in November 2021

Highlights 

  • The small-cap index represents businesses that are presently in the growth phase of the business cycle and hold a lower market cap.
  • A company with a superior business model and good management tends to outperform peers and generate superior returns for the shareholders.

As most of the small-cap companies belong to the growth stage of the business cycle, their revenues and profitability depend on the success of the underlying business model. A company with a superior business model and good management tends to outperform peers and generate superior returns for the shareholders.

The small-cap index of the London Stock Exchange represents businesses that are currently in the growth stage of the business cycle and hold a lower market cap compared to mid-cap and large-cap stocks. The stock of such companies comes under the category of high risk and high return, which are most suitable for risk-taking investors.

Top Small Cap stocks

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Let us look at 5 FTSE listed small-cap stocks that could be a good buy during the coming month:

Superdry Plc (LON: SDRY)

The company operates in the clothing and accessories business offering cloths under the Superdry brand in the UK and other European countries. It operates through various channels like stores, E-commerce, and Wholesale. The company reported 1.9% growth in the revenue in the 18-week ended 28 August 2021 mainly due to ease in the Covid-19 restrictions.

The store segment revenue was up by 76% in the UK market due to improving footfall. The company has a positive outlook for the financial year and continues to focus on cash generation and working capital efficiency. Also, the company is targeting growth opportunities in the Ecommerce and Wholesale business.

Superdry Plc’s current market cap stands at £209.79 million. In the last one year, the stock has given a 48.56% return to its shareholders.

EnQuest Plc (LON: ENQ)

The company operates in the oil and gas sector, which explores the oil and gas reserves in the UK North Sea and Malaysia. The company reported higher revenue at USD 518.3 million, a rise of 15.2% despite lower crude oil production, which declined by 30.1% during the six months ended 30 June 2021.

Higher revenue was primarily due to the rise in crude oil prices in the international market. Also, the company has completed the acquisition of the Golden Eagle Area Development, which is a high-quality cash generating asset delivering higher production and reserve for the company.

EnQuest Plc’s current market cap stands at £479.02 million. In the last one year, the stock has given a 175.94% return to its shareholders.

Motorpoint Group Plc (LON: MOTR)

The company operates a vehicle dealership across the UK. It sells new vehicles and old cars from different brands through its E-commerce website and network of retail branches. The company’s online sales grew by 53%, which indicates the company has been successful in transforming into a digital-led business. Overall, the group revenue was up by 57%, driven by strong consumer demand for used vehicles.  

Motorpoint Group Plc’s current market cap stands at £316.57 million. In the last one year, the stock has given a 25.05% return to its shareholders.

Goodwin Plc (LON: GDWN)

The company operates through two sectors, i.e., mechanical and refractory engineering. Through these two divisions, the company design and manufactures various industrial equipment which has a wide range of application. It reported revenue of £131 million for the financial year ended 30 April 2021, while its pre-tax profit rose by 36% at £16.5 million.

Goodwin Plc’s current market cap stands at £272.21 million. In the last one year, the stock has given a 20.45% return to its shareholders.

Foresight Group Holdings Ltd (LON: FSG)

The company invests in businesses and manages investment for institutional investors and family offices. It invests in new-age companies that have a sustainable operation and has a strong environmental, social & governance (ESG) focus. The company reported a 25% growth in Assets under Management (AUM) to £8.1 billion for the six months ended 30 September 2021. Asset growth was driven by strong retail participation, which saw net inflow similar to pre-pandemic levels. As a result, the company has kept its revenue and EBITDA target for the full financial year unchanged.

Foresight Group Holdings Ltd’s current market cap stands at £484.25 million.

 

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