3 Small-Cap Giants With Big Growth Trajectories


  • The economy is on the up-and-up and looks like it will continue strongly for the next few years.
  • Inseego (INSG): Promising 5G technology places Inseego as a top contender for large supplier contracts.
  • Digi International (DGII): If you’re looking for low-risk and strong growth in the short and long term, this is your stock. 
  • ACM Research (ACMR): Especially if you’re more risk-tolerant, this under-the-radar semiconductor stock could be a multi-bagger.
small-cap stocks - 3 Small-Cap Giants With Big Growth Trajectories

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The future of the U.S. economy looks promising in 2024, with experts describing it as a Goldilocks moment. Anticipated faster growth, decreasing inflation and robust job creation signal a positive shift from recession fears in 2023. The National Association for Business Economics predicts a 2.2% rise in the gross domestic product, reflecting a more optimistic outlook, while the Federal Reserve’s expected interest rate cuts and the resilient job market contribute to a brighter economic landscape. That means as the economy continues to grow, these small-cap stocks will as well.

Inseego (INSG)

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Inseego (NASDAQ:INSG) provides cloud computing and advanced networking solutions for businesses both large and small. Already a leading supplier of 4G wireless connectivity solutions, INSG has amassed a valuation of $2.20 with a stable YTD valuation change of -4.35%. 

INSG is fully established in the market but shows signs of future growth. It was valued at $26 million in 2023, and the U.S. telecom market size is expected to reach $587.34 billion by 2033 — a CAGR of 3.42% from 2023 to 2033.

Financially, INSG improved on a few metrics during Q3 2023. While INSG reported $48.6 million in revenue, marking a YoY decrease of 30%, revenue for 5G Fixed Wireless Access increased 29%. Cash from operations and net change in cash received massive surges of $7.17 million and $376.00K respectively, both increasing over 100% YoY. Overall, Q3 ‘23 proved to be successful for INSG, with the company outperforming previous years’ cash from investing by 23%. 

INSG is set up for success through recent announcements of expansion of services into 5G. INSG is already a top provider in the 4G sector. Cowen expects it to harvest average revenue growth of roughly 20% per year over the next five years. It valued the stock at nearly 80% above its current price. As INSG continues to include an emphasis on introducing 5G, expect INSG’s valuation to climb as more customers gravitate towards the company’s services.

Digi International (DGII)

a photo of a city with a digital grid overhead, showing the wide range of connectivity that comes with 5G. communications stocks

Digi International (NASDAQ:DGII) is a company that provides services that enable companies to share and communicate data across industries. It offers a wide variety of IoT (Internet of Things) solutions, encompassing both hardware devices and software applications. DGII’s stock is currently $29.60, up 34% since last November.

The IoT industry is projected to grow by over $1 trillion in the next five years, with a CAGR of 15.12%. It will take off with products seamlessly fitting in with the next generation of technology. 

Digi International has been outpacing its industry, growing at a rate of 12.3% to an industry level of just 8.5%. The cash flow growth each year is over four times the industry average. Digi International will likely continue its way throughout 2024, as the company looks to expand its products and customer base. It posted nine straight record quarters, showing its positive trend and success in the IoT space. 

With the rise of AI, IoT products are going at the forefront of innovation, a place where DGII will excel. This should be a lock to buy that will make massive gains in your portfolio.

ACM Research (ACMR)

a magnifying glass enlarges the ACM logo on a website
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ACM Research (NASDAQ:ACMR) is a global, world-class equipment manufacturer serving the IC, compound semi, wafer-level packaging and wafer manufacturing markets with a broad portfolio of products. ACMR’s current stock value of $21.79 grew 106.54% in the past year.

The semiconductor market size could grow from $573.44 billion in 2022 to $1,380.79 billion by 2029, a 12.2% CAGR over that period.

ACMR experienced historical growth in Q3 2023. ACMR reported $168.57 million in revenue, making a YoY increase of 26.07%. Net income and diluted EPS, $25.68 million and $0.39, respectively, increased over 20% YoY. 

Due to the rapid increase in demand for semiconductors, management expects this historical growth to continue in the 2024 fiscal year. ACM also announced it expects revenue for the full year 2024 to be between $650 and $725 million. Factors like trade policy impact, customer spending, supply chain constraints and field tool evaluations shape decision-making and planning.

If you could tolerate a risk, this could be a stock that will turn your $1,000 to $1 million.

On the date of publication, Michael Que 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.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.

Article printed from InvestorPlace Media, https://investorplace.com/2024/02/3-small-cap-giants-with-big-growth-trajectories/.

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