This is the worst first week of a new trading year on record.
But don’t be alarmed — it’s a good sign for stocks that can thrive in volatility, like these seven A-rated small caps.
Most of them have come off a bit from their big year in 2015, but that makes them all the more attractive. This broad selloff means that good stocks are better buys, if you know what you’re looking for.
These seven are a diverse group, representing a number of sectors. There are winners in good sectors, but not all the stocks are going to fare well. Either way, it’s a stock picker’s market when things get volatile.
Small caps also usually do well when there is a growing economy, and the U.S. is certainly in that camp. And these stocks are all domestically dependent for their success.
A-Rated Small-Cap Stocks to Buy: Digi International (DGII)
Digi International (DGII) is an innovative company making strides in a major growth sector usually out of the spotlight, but crucial to new models of business — providing the skill equipment for machine-to-machine networking.
M2M allows machines to monitor operations and assets in remote locations and automate certain efforts to make their operation more efficient. Whether that’s tracking rail cars or electric generators or ATM machines, DGII helps companies digitize and optimize their businesses.
While it’s relatively easy for people to upgrade their technology, it’s an entirely different story for industrial-size businesses.
It’s a necessity in the age of Big Data, and DGII is growing into a major player.
A-Rated Small-Cap Stocks to Buy: Heska (HSKA)
Heska (HSKA) is a key part of the States’ $60 billion pet healthcare industry.
It provides equipment and support to veterinary clinics: everything from blood diagnostics, to heartworm and allergy medications to digital imaging equipment.
It’s the back office of pet healthcare world, but this is a big business. Just like human healthcare, animal healthcare is stepping into the digital age; and as people continue to spend more on their pets, vets have many new opportunities to provide higher levels of care and health maintenance.
HSKA also has a line of vaccines and pharmaceuticals for cattle and other larger mammals.
Its allergy division is a global player, headquartered in Switzerland with markets in Australia, New Zealand, Japan, Hong Kong, Canada and South Africa, among others.
A-Rated Small-Cap Stocks to Buy: Cape Bancorp (CBNJ)
Cape Bancorp (CBNJ) is a great play on the comeback in regional banks.
Large money center banks continue to dig themselves out of the financial mess of 2008, spending billions on legal fees for their questionable actions. They are also having to rebuild their trading desks and overhaul their business models.
Regional banks like CBNJ don’t have any of those worries. They survived the financial tsunami because they were good solid banks with local individuals and small- to mid-sized business customers.
They stuck to their knitting. And now they’re reaping the benefits of being traditional bankers. The economy is coming back and they will be first in line to benefit.
Serving the hot Cape May, NJ resort region will also get a boost from increased tourism as more Americans have more money in their pockets for travel.
A-Rated Small-Cap Stocks to Buy: A-Mark Precious Metals (AMRK)
A-Mark Precious Metals (AMRK) has been in the precious metals markets since 1965, offering customer gold, silver, platinum and palladium for storage or delivery in virtually any form a customer is interested in — coins, bars, etc.
AMRK also provides financing, leasing, consignment, hedging and a variety of customized financial programs and services.
Given the volatility in the currency markets — with most of the world still lowering rates and trying to spur growth and the Federal Reserve raising interest rates — hard assets are going to have a very good year.
Gold is up huge, and silver is making an even bigger run. This will continue into 2016 and AMRK should have a banner year.
A-Rated Small-Cap Stocks to Buy: Autobytel (ABTL)
Autobytel (ABTL) is the leading company in digitizing auto dealerships.
It used to be that you looked through the newspaper classifieds for the latest sales and deals on new and used cars. But the Internet has now supplanted ink and paper.
The thing is, dealerships aren’t usually filled with tech savvy people bunkered up in crackerjack IT departments with world-class graphic designers.
That’s where ABTL comes in. It works with retailers and manufacturers to find customers using state of the art marketing and branding techniques. The best thing for ABTL — it’s developed a relatively plug-and-play system, so it can expand its business quickly.
Given the record car sales in the U.S. during 2015, Autobytel’s value is continuing to increase among it customers and potential customers.
A-Rated Small-Cap Stocks to Buy: Digirad (DRAD)
Digirad (DRAD) is a niche play in the transitioning healthcare sector.
It provides diagnostic imaging solutions on an as needed basis. It’s the imaging world’s version of pizza delivery.
But seriously, this is a big deal. It means physician practices, outpatient clinics and even hospitals can build in more flexibility about what equipment they buy and have to maintain (as well as staff) and what can be contracted out.
Given the restructuring of costs and the emphasis on efficiencies in the new Affordable Care Act, DRAD is a silver bullet in the imaging sector.
The stock took off in October and it’s continuing to acquire smaller firms in the space to build out its operation and grow its margins. This is a young company with a big future.
A-Rated Small-Cap Stocks to Buy: NV5 Global (NVEE)
NV5 Global (NVEE) is a commercial engineering and construction company.
It is full-service firm that has a significant portfolio that includes government, municipal, utility clients and many energy, environmental and infrastructure projects.
There are major projects across the country regarding upgrading the electrical grid, burying power lines, pipelines for natural gas distribution and renewable energy links.
NVEE has experience in all these sectors. These are the kind of projects that help grow jobs and boost the economy, and they are the kind of projects that take many years to complete, so the cash flow is steady.
The stock was up nearly 50% in 2015, but has sold off a bit since. If you’re bullish on the U.S. economy, this is a great way to play it.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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