The market is turning a little more volatile now that bonds have risen from their slumber. Investors are looking for opportunities off the beaten path, rather than buying into some of the more well-worn sectors.
And there are some interesting stocks out there that have been overlooked in some hot sectors as well as some smaller sectors that have been overshadowed as big-name stocks dominate.
That’s why I wanted to share these seven micro-cap stocks to roll the dice on. They’re solid companies with successful businesses in their niches. They just don’t get the press that some of their bigger contemporaries get.
And that’s fine. It means you can take some of your fun money or risk capital and deploy it here without having to pay extreme premiums.
Here are 7 micro-cap stocks to buy that are shining right now:
- Acme United (NYSE:ACU)
- Blue Ridge Bankshares (OTCMKTS:BRBS)
- CF Bankshares (NASDAQ:CFBK)
- Escalade (NASDAQ:ESCA)
- Meridian (NASDAQ:MRBK)
- Security National Financial (NASDAQ:SNFCA)
- Champions Oncology (NASDAQ:CSBR)
An expanding economy forms ideal conditions for these stocks to thrive. Let’s take a look at the particulars.
Micro-Cap Stocks to Buy: Acme United (ACU)
Yes, this micro-cap stock has an unusual niche and no, it’s not tools for catching Road Runner. For more than 150 years, ACU has made cutting, measuring and safety products for individual and industrial use.
The name might not be familiar because it sells its targeted products under various brands like Camillus, Claus, DMT Sharpeners and Wescott, to name a few. It sells its products across North America, Europe and Asia.
Given its age and global network, you might assume this company has a multi-billion market cap. But that’s the surprise. It has a $130 billion market cap and that’s after ACU stock made a 96% run higher in the past 12 months. And even after that run, the stock is still trading at a current P/E of 17.
It even has a 1.3% dividend. ACU isn’t looking to grow into a massive company, but occupies its strategic niches successfully and dependably. And the sectors it’s in should all benefit from an expanding economy and loosening pandemic protocols.
Blue Ridge Bankshares (BRBS)
Community banks are a unique form of banking that really only exists in the U.S. Part of the reason is the way the U.S. expanded, which made developing areas opportunities for individuals and groups to invest in the towns that were being built.
But since the 1990s, community banks have lost their influence as national banks have moved in. It certainly doesn’t help that various financial scandals have hurt these institutions much more than larger ones.
However, there are some community and regional banks that are doing well because of their locations. And BRBS is one of them.
Founded in 1893, BRBS serves Charlottesville, Virginia, home of Thomas Jefferson and James Madison. There’s also the prestigious University of Virginia and its medical center. And the area is now booming with people leaving the Washington, D.C., and other urban areas for more rural living with modern conveniences.
BRBS and other community banks tend to be the lenders behind local projects. And in growing communities that’s a big deal. This micro-cap stock has a market cap of $275 million and is up 37% this year, with a healthy dividend above 2.7%.
CF Bankshares (CFBK)
Similar to BRBS, this community bank has been serving Ohioans since 1892, first as a savings and loan and now as a bank.
In manufacturing towns, small banks and credit unions are still the lifeblood of communities. They finance projects with local investors, they loan to local businesses and they know their customers by name.
In our digital age, this kind of personal contact remains at the heart of banking for many customers and bankers. And these are the banks that helped bail out their local communities during the pandemic. Now that the worst is over and interest rates are rising, these banks are better able to breathe again.
Smaller than BRBS, CFBK has a market cap of around $130 million it’s up almost 100% in the past 12 months yet has a P/E of 4.
Are you a pickleball fan? How about pool, ping-pong, darts or basketball? If so, you’ve likely used equipment made by micro-cap stock ESCA. It also makes fitness and archery equipment under its various brands as well.
While some of these activities are a good way to spend time sitting around the house, the real fun is doing them with others. And that day is coming soon, with many states easing restrictions on public gatherings as vaccinations continue to expand.
That’s the play here. During the pandemic, ESCA stock was very popular since it sells a lot of home equipment. That’s why the stock is up 308% in the past 12 months. But there’s even more growth when public gathering spots open up.
ESCA has a market cap of $293 million now, delivers a 2.7% dividend and still trades at a PE under 12.
Unlike others, this community bank is a relative newcomer to the market. Launched in 2004, this bank served the Philadelphia area to begin with. It then extended its mortgage operations to the neighboring states Maryland, Delaware and New Jersey.
Similar to its community bank brethren, this micro-cap stock is up 93% in the past 12 months, has a 1.9% dividend and trades at an ultra-low P/E of 6.
While MRBK stock has certainly seen its share of investors in the past year, its $161 million market cap has also pushed investors away, preferring financial companies with double- or triple-digit billion dollar market caps.
MRBK stock is in a great place and has built a solid book of business in a very hot real estate market that isn’t going to slow down anytime soon.
Security National Financial (SNFCA)
No, SNFCA isn’t another community bank. But it is an interesting boutique micro-cap insurance company with a twist.
This Utah-based company does a little bit of everything. It owns and operates eight cemeteries. It has a mortgage business. And it sells life insurance. It’s literally a cradle to grave company.
All this in a neat little package with a $183 million market cap. Aside from the mortgage piece, these aren’t exceptional growth sectors, but they do provide a solid base for its more dynamic mortgage business.
And it’s likely that mortgage division is why the stock is up 128% in the past year, as investors looked for a targeted way to play the real estate market in Utah. But even after that run, the stock is still trading at a low P/E of 3.
Champions Oncology (CSBR)
Despite its name, this micro-cap stock isn’t a biotech stock. Launched in 1985, CSBR has built a unique and powerful database of patient-derived xenograft (PDX) tumors so that drug companies and researchers can explore various aspects of tumor genetics and RNA sequencing to compare cohorts and other information.
It has built this database by implanting human tumors in immune-deficient mice and tracking tumor growth and expression. CSBR licenses its TumorGraft technology to pharmaceutical, biotech and medical research companies.
Since its beginnings in 1985, CSBR has been a tech company at the cutting edge of the powerful new processing power available to it. And the trend toward outsourcing non-core functions that continues in the biotech industry is all good news for CSBR.
With a market cap of $151 million, even after a 61% rally in the stock during the past 12 months, it’s well positioned to build its business or get acquired at a premium in coming years.
Disclosure: On the date of publication, Louis Navellier has no positions in any stocks in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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