Small-cap stocks typically have a market cap of $1 billion or under. They appeal to investors looking for companies to invest in that have significant growth potential. However, large growth potential also means increased volatility and greater risk. So investors need to be cautious regarding overexposure to small companies. It is a great practice to focus on diversification in industry as well as size of the companies in your portfolio.
Below, I list three companies that offer investors looking for small-cap stocks the potential for huge growth in 2024.
GigaCloud Technology (GCT)
GigaCloud Technology (NASDAQ:GCT), located in Walnut, CA, is an e-commerce company focusing on B2B transactions of large merchandise such as furniture, gym equipment, kitchen supplies, and other household needs. Gigacloud Technology started trading on the NASDAQ beginning in mid-2022, and over the last year, the GCT stock price has more than tripled. The company has recently experienced better-than-expected returns and has investors excited about its future expansion process.
Last September, GigaCloud Tech announced the opening of three warehouses in Germany as well as the U.S. It completed its acquisition of Noble House Home Furnishings LLC in November, which enabled further expansion of furniture products. Finally, also in November, GCT announced its acquisition of Wondersign.
On Nov. 30, GigaCloud Technology reported its earnings for the third quarter of 2023, which stated that revenue improved by 39% compared to the previous year. Net income for the third quarter of 2022 was $657,000, and for the Q3 of 2023, it was $24 million.
Blue Bird (BLBD)
Blue Bird (NASDAQ:BLBD), headquartered in Macon, GA, operates mainly as a school bus manufacturer, producing specialty buses, electric school buses, and diesel-powered buses, among other power options. They also have a deviated parts distribution segment that focuses on order fulfillment.
Blue Bird reported earnings for the fourth quarter of fiscal year 2023 on Dec. 11, which stated that total revenue jumped by 18% year-over-year. In Q4 fiscal year 2022, they reported a $23 million net loss; a year later, for Q4 fiscal year 2023, it was a net income of $19 million.
Blue Bird saw its share price increase by over 10% directly following this earnings release due to the company’s increase in sales and overall unit sales of 5% year-over-year. Blue Bird being a leading bus manufacturer and their shift towards more sustainable power options such as electric and other low-emission busing put Blue Bird in a position to keep dominating the market.
CECO Environmental (CECO)
CECO Environmental (NASDAQ:CECO) is headquartered in Dallas, Texas. They are an environmental services company that provides industrial air and water treatment products such as expansion joints, wastewater treatment systems, dust collectors, wet and dry scrubbers, metallic pumps, and fabrication equipment.
In the past year, CECO Environmental has seen an increase in its share price of 69% due to an improved financial position for 2023. Last July, CECO was included in the Russell 2000, a stock market index comprising small-cap U.S. companies. In September, they announced the acquisition of Kemco Systems, an industrial wastewater treatment company.
On November 7, the company reported third-quarter earnings for 2023, in which they stated a total revenue growth of 38% and a net income increase of 71% compared to the year before. CECO Environmental also raises its outlook throughout the end of 2023. Following this positive earnings report, the company saw its share price increase by 11%.
As of this writing, Noah Bolton did not hold (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.
