Small-cap companies are a great option for early investors because they are typically less expensive per share than large-cap stocks. They are also typically more volatile investment vehicles because they have a greater chance of large fluctuations in share price than other large companies, which could be a downside or an upside depending upon an investor’s goals.
It’s always a good idea to focus on diversification within an investment portfolio and include more than just different sectors. It also should consist of companies with varying market caps, enabling an investor greater exposure to the market as a whole.
Here is a list of the best small-cap stocks of 2024 with under $1 billion in total market cap for investors looking for significant gains in small companies.
SurgePays (SURG)
SurgePays (NASDAQ:SURG) is a communications technology company that provides fintech and broadband services. Its products include ShockWave and Surge Blockchain, a cloud-based and fintech platform.
Over the past year, its stock price has risen by 19% due to acquisitions and recent improved financial results. On Nov. 14, SurgePays reported third-quarter earnings for 2023 showing a net loss in Q3 2022 of $1.5 million, compared to a net income of $7.1 million in 2023. Its total revenue fell by 6% compared to the year before, and SurgePays’ profit margin grew by 31% year-over-year.
Recently, it announced the acquisition of ClearLine Mobile, a digital marketing business that will enable increased customer interactions during typical transactions. On Jan. 23, Surge Pays sent out a press release detailing it partnered with Sin Pin, a communications company geared towards the immigrant community.
SurgePays has been experiencing several new developments within its business and is positioned well to offer investors large gains throughout 2024.
Ardmore Shipping (ASC)
Ardmore Shipping (NYSE:ASC) is a marine transportation company that ships chemical and crude oil products with 22 vessels.
Ardmore, similar to other marine shipping companies, offers a strong dividend yield of approximately 7% annually. Its last quarterly dividend payout was 16 cents per share, distributed on Dec. 15.
Within the last few months, its stock price has risen by 17%. Its third-quarter earnings report beat analyst estimates but saw a decline in overall revenue compared to the previous year. Revenue dropped 39%, and net income declined by 66% — partly from reduced spot prices of the prior year.
At the moment, there is a crisis occurring in the Red Sea drastically affecting shipping lanes around the Horn of Africa due to attacks by Iran-backed Houthi rebels. That is causing large delays, diversion and shipping costs to skyrocket faster than pre-pandemic levels.
Ardmore Shipping is a well-positioned company in the shipping market and could take advantage of increasing spot prices in the near term, potentially increasing future revenue. With the crisis in the Red Sea disrupting shipping lanes, companies like Ardmore could still benefit from increased shipping rates.
Weave Communications (WEAV)
Weave Communications (NYSE:WEAV) operates a communications software platform focused on providing small and medium-sized companies with improved customer relations through specifically mundane tasks, including scheduling, reminders, text messaging, processing payments and phone calls.
Over this past year, its stock price rose 155% due to a growing customer base and increased revenue. On Nov. 1, Weave Communications reported earnings for the third quarter, stating that its total revenue grew by 20% on top of a reduced net loss, which shrunk by 40%. It also partnered with Affirm Holdings (NASDAQ:AFRM) to provide its customers with flexible payment options. The outlook for revenue in the fourth quarter is projected to be $43.5 to $44.5 million.
Weave is positioned well in the communications services environment, with its customer base continuing to grow and improve revenue potential in the near term. Most notably, it has improved its free cash flow. In Q3 2022, its free cash flow was negative $4.6 million. In Q3 2023, it has drastically improved to a positive $2.1 million, a major indicator that the company is heading in the right direction and will continue offering investors great gains in 2024.
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.
