Delving into which are the best small-cap growth stocks to buy can be thrilling for those willing to stomach the risk, with incredible potential for long-term returns.
While blue-chip stocks offer stability and dividends, it’s in small-cap investing where investors might strike gold and generate multi-bagger returns. Navigating this dynamic landscape of small-cap winners requires patience, but the rewards can be life-changing.
For investors looking to take their portfolios to the next level, a long-term strategy focused on small-cap growth stocks propels individuals to millionaire status.
While it’s essential to limit exposure and maintain a balanced portfolio, allocating just 15% to 20% to these hidden gems could prove incredibly fruitful over the long run.
With strong tailwinds propelling them forward, these companies have the potential to deliver stupendous returns, effectively transforming your portfolio. That said, let’s explore these exciting small-cap growth stocks and embark on a journey toward financial success.
| ELA | Envela | $6.25 |
| BORR | Borr Drilling | $7.11 |
| IPI | Intrepid Potash | $26.00 |
Envela (ELA)
Among the top opportunities in small-cap stocks poised for a breakout is Envela (NYSEAMERICAN:ELA). This innovative company operates in the burgeoning re-commerce sector, which focuses on reselling previously owned products as whole goods or repurposing their components and materials for reuse.
By capitalizing on this resourceful approach to commerce, the firm has grown its revenues by roughly 28% in the past 5-years on average. Moreover, it boasts a remarkable profitability profile, marked by a 5-year average net income margin of roughly 4.7%.
It wrapped up 2022 with an all-time sales record of $182.7 million, an amazing feat given the challenging market conditions. As we advance, it expects to continue posting robust results despite an adverse business environment.
Therefore, there’s a lot to like about Envela over the long term, as it carves out an even bigger share in the re-commerce market. According to market research firm Statista, the U.S. re-commerce sphere could grow from $130.4 billion in 2019 to a whopping $244.7 billion by 2025.
Borr Drilling (BORR)
Borr Drilling (NYSE:BORR) is a leading offshore drilling services provider which defied market trends last year with a staggering 70% increase in its stock price over the past year.
With an optimistic growth outlook on the horizon, there’s plenty of reason to believe that its impressive growth trajectory will continue for the foreseeable future.
The firm boasts an impressive track record over the years, with a fleet of 21 contracted jack-up rigs and two more under construction. Last year was a stellar one for its business. It generated $443.8 million in sales, expecting an eye-catching 71% bump in 2023 to $760 million.
Its adjusted EBITDA rose to $157.4 million in 2022, which it projects to soar to a remarkable $380 million.
As we look ahead, the company’s massive $1.7 billion order backlog through 2022 sets the stage for a strong order intake in 2023.
As positive cash flows stream over the next few years, Borr Drilling’s credit metrics will improve substantially. Analysts at Tipranks anticipate a 44% upside from current levels.
Intrepid Potash (IPI)
Intrepid Potash (NYSE:IPI) is a top Denver-based fertilizer manufacturer that stands out in the realm of natural resources. It has established itself as a leading producer of potassium chloride globally.
With a debt-free business, the firm is in position to weather economic storms and ride high on the boom periods. Despite the headwinds, it generated a healthy 31.6% year-over-year revenue growth in the past year.
Products like potash and Trio, which enhance crop yields, will be essential for securing the world’s food supply. With the recent global food crisis triggered by Russia’s invasion of Ukraine, fertilizer companies like Intrepid stand to benefit as the demand for higher crop yields increases rapidly.
The Fertilizers Price Index has surged over 100% in the past three years and currently remains well above average, hinting at a promising outlook ahead for Intrepid.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
