5 Small-Cap Stocks Poised to Pop When the Shutdown Ends

Washington's stubbornness has punished these stocks, but a bounce is in the cards

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5 Small-Cap Stocks Poised to Pop When the Shutdown Ends

The Ryland Group

ryl 5 Small Cap Stocks Poised to Pop When the Shutdown EndsWhile most of the federal government’s mortgage loan-guarantee programs (like the FHA) are still operating, many of them are operating on thinner staff, meaning it’s taking longer to complete the lending process. And, for certain loan types and agencies that require annual funding (like FHA’s multifamily housing office or the USDA), they’re not backing any mortgage loans until further notice … which is to say, until the government’s bank account is refilled.

The reduction in the number of loan approvals as well as a reduction in the length of time to get a loan approved certainly hasn’t helped homebuilders like The Ryland Group (RYL); RYL shares are down almost 5% in October.

But the bigger threat to Ryland is the sheer uncertainty of buying a home in a foggy real estate environment. Once the shutdown ends and the lending gears get oiled again, however, Ryland and other small cap stocks in the industry should perk right back up.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/10/5-small-cap-stocks-poised-pop-shutdown-ends/.

©2014 InvestorPlace Media, LLC

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