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Highlights:
- Talos Energy, Inc. (NYSE:TALO) intends to report its Q3 FY22 earnings results on November 2.
- Net product revenue of Catalyst Pharmaceuticals rose 57.7 per cent YoY .
- Digi International Inc. (NASDAQ:DGII) would release its financial results for Q4 FY22 and fiscal 2022 on November 10.
Small-cap stocks are publicly traded firms whose market cap ranges between US$ 300 million and US$ 2 billion. Several big companies started their journey as small-cap companies, and hence, the investors often explore opportunities in these stocks due to their low prices.
Although there are several companies in the segment, some prominent names include American Vanguard Corporation (NYSE:AVD), Talos Energy, Inc. (NYSE:TALO), Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX), RPC, Inc. (NYSE:RES), and Digi International Inc. (NASDAQ:DGII).
However, the stocks could be highly volatile at times due to their lower prices, due to which, sometimes, the market cap of the companies exceeds or goes down from the range mentioned above.
However, the recent strong dollar has disrupted global businesses amid a plethora of uncertainties hurting the investors' spirit. But on the other hand, it had helped the small-cap stocks in their run.
On the other hand, the S&P 600 index, which tracks the performances of small-cap stocks, added 1.16 per cent while the S&P 500 gained rose 1.14, suggesting that investors are also keeping a watch on the small-cap stocks.
Let's explore the small-cap stocks for Q4 that may be explored this year
American Vanguard Corporation (NYSE:AVD)
The chemical manufacturing firm American Vanguard, holds a dividend yield of 0.45 per cent, and its market cap was US$ 708.14 million, fulfilling the requirements of being a small-cap stock.
The diversified agricultural company produces agrochemicals and provides pesticide delivery solutions.
The stock of the chemical manufacturing firm was up around 37 per cent YTD and nearly 43 per cent YoY. In the running month through October 19, the AVD stock rose over 20 per cent.
The Newport Beach-based diversified agricultural company's net income was US$ 6.8 million on sales of US$ 148 million in Q2 FY22, compared to a gain of US$ 5.1 million on net sales of US$ 135 million in the year-ago period.
Talos Energy, Inc. (NYSE:TALO)
The energy company Talos Energy primarily focuses on offshore oil and gas exploration. The oil and gas firm specialises in exploring, developing, and producing oil and natural gas properties on the Gulf Coast and the Gulf of Mexico.
The company's market cap was US$ 1.64 billion, and its stocks jumped over 101 per cent in the running year while adding over 59 per cent YoY. In the current month through October 19, the TALO stock soared over 18 per cent.
The energy company intends to report its Q3 FY22 earnings and operating results on November 2, after the US market closes.
Meanwhile, in Q2 FY22, its revenue was US$ 519.1 million, driven by the higher oil and natural gas liquids (NGLs) prices, while in the year-ago period, its revenue was US$ 303.76 million. Talos Energy's net income totalled US$ 195.14 million in the period, against a loss of US$ 125.78 million in Q2 FY21.
During its second quarter fiscal 2022 earnings release, the oil and gas company said it had produced 65.4 million barrels of oil equivalent per day (MBoe/d) in the period.
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Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)
Catalyst Pharmaceuticals is a biopharmaceutical firm with a market cap of US$ 1.29 billion. The company engages in the development of therapeutics for treating rare diseases like Lambert-Eaton myasthenic syndrome, etc.
The Coral Gables, Florida-based biopharmaceutical firm's stock soared over 90 per cent YTD and over 117 per cent YoY. In the running month through October 19, the CPRX stock traded near the flat line and touched its 52-week high of US$ 17.22 on September 13, 2022.
Catalyst Pharmaceuticals' net product revenue surged 57.7 per cent YoY and 23.3 per cent QoQ to US$ 53 million in Q2 FY22, while its net income totalled US$ 21.6 million, compared to US$ 12.2 million in the year-ago period.
RPC, Inc. (NYSE:RES)
RPC Inc is an oil and gas services firm with a dividend yield of 0.99 per cent, and the company's stock jumped 79 per cent in 2022. The US$ 1.84 billion market cap firm provides several specialized oilfield services and equipment to independent and major companies in the oilfield segment.
The RES stock jumped 47 per cent YoY, and in the running month through October 19, its price was up over 17 per cent. Meanwhile, the firm said that it would release its quarterly earnings results for the period ended on September 30 on October 26.
In Q2 FY22, RPC, Inc's revenue rose 31.9 per cent QoQ and 98.9 per cent YoY to US$ 375.5 million, while its net income was US$ 46.93 million, compared to a loss of US$ 726,000 in Q2 FY21.
Digi International Inc. (NASDAQ:DGII)
Digi International is an industrial-focused technology firm with a market cap of US$ 1.25 billion. The company, with a P/E ratio of 98.75, provides Internet of Things (IoT) products and services in various sectors, including retail, industrials, medical, etc.
The stock of the Minnetonka-based IoT firm rose around 44 per cent YTD and 67 per cent YoY. The DGII stock touched its 52-week high of US$ 38.95 on October 6, from which it traded nearly eight per cent down on October 19.
The technology company announced on October 10 that it would release its financial results for Q4 FY22 on November 10 at around 8:00 am ET.
In Q3 FY22, Digi International's revenue rose 31 per cent YoY to US$ 104 million, and its diluted EPS mounted 33 per cent YoY to US$ 0.12 per share.
Bottom line:
While several analysts say that the prices have fallen to their lowest level in recent days amid a chain of macroeconomic headwinds weighing on the sentiment, some have argued that it's not attractive enough to some investors.
Given that, several investors might look for opportunities in the small-cap segment. In addition to that, some investors also look for short-term holding for small-cap stocks due to their highly volatile nature.
Comparing the performance of the S&P 500 and S&P 600 index, the former fell nearly 22 per cent YTD and about 17 per cent YoY, while the latter declined around 19 per cent YTD and 17 per cent YoY.
However, as said earlier, small-cap stocks are highly volatile and could prove beneficial sometimes when held for a longer term. Given the market's downward trends, investors should consider all the ups and downs before making their bets.
