Small stocks are blasting past the S&P 500 — and investors are loading up on a handful of them fast.
Ten stocks in the SPDR Portfolio S&P 600 Small Cap ETF, including health care play Cytek Biosciences, real estate Hudson Pacific Properties and communications services AMC Networks, jumped 65% or more since the index set its 52-week low on Oct. 27, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
These giant gains in such a short period of time highlight the power of small stocks' rally. "It took just 48 days for (small stocks measured by) the Russell 2,000 (index) to go from a 52-week low to a 52-week high," said Bespoke Investment Group. "Remarkably, that was the shortest turnaround time ever for the Russell to go from 52-week low to 52-week high."
Behold The Big Rally From Small Company Stocks
Small stocks are blasting past all the major indexes from their lows, including the S&P 500. And it's a rotation some investors have awaited.
The SPDR Portfolio S&P 600 Small Cap ETF is up 20% from Oct. 27. That outpaces the S&P 500's 15% rise in that time. It even surpasses the Invesco QQQ Trust's 18% rise in that time. It's a rally some anticipated given all the attention on just the largest S&P 500 companies. "When things turn small caps could move up 15% to 20% very rapidly," said Robert Maltbie, fund manager of Argonaut 2000 Partners, back in June.
And now it's happening.
Biggest Small Company Stock Winners
How would you like a 112.7% gain less than two months? Small-cap Cytek Biosciences pulled it off.
The Fremont, Calif.-based company that provides cell analysis tools used in medical research has seen its shares take off since small caps bottomed this year. It's the top performer in the S&P 600 in that time period, pushing its market value to $1.2 billion. Investors are hopeful the company can return to profitability. Shares are still down 10% this year. Cytek Biosciences, though, is seen making an adjusted 2 cents a share in the fourth quarter, making up for a penny a share loss in the September quarter.
Meanwhile, Hudson Pacific is defying broad concerns on real estate. Yes, shares of the Los Angeles-based office space landlord are down nearly 11% this year. But hope springs eternal in L.A. real estate. Shares surged 90% from small-cap stocks' low in October. The company is involved in the management of the One Westside offices in Los Angeles thought to be soon occupied by a large enterprise, possibly Alphabet. It was previously a low-occupancy mall made popular in a Tom Petty music video.
Not, Not That AMC
AMC Networks is another small-cap winner, jumping nearly 74% from the S&P 600's low. And no, it's not the same as struggling movie theater chain AMC Entertainment Holdings, caught up in 2020's now-dead meme stock rally. That stock isn't in the S&P 600 and is down 26% since Oct. 27.
AMC Networks on the other hand, which owns the AMC, BBC America and IFC networks, is rallying. It's up nearly 24% this year. The company's market value is now $894 million. Still small, but analysts seem to think the profit bleeding is slowing. The company's profit is only seen falling 8% in 2024. That's down, yes, but an improvement from the expected 20% decline in profit this year.
And that's kind of the point. If investors shift away from rock-solid big caps with massively profitable business, they'll need to be able to endure some volatility for the added returns.
"Be careful out there at this point, though," Bespoke said. "Things have gotten extremely overbought in the short-term. Let these overbought levels get worked off, because we won't stay overbought forever."
Top S&P 600 Small Cap Stocks
From the index' 52-week low on Oct. 27
| Company | Ticker | % from low | Sector |
|---|---|---|---|
| Cytek Biosciences | 112.7% | Health Care | |
| PRA Group | 89.8 | Financials | |
| Hudson Pacific Properties | 89.6 | Real Estate | |
| AMC Networks | 73.6 | Communication Services | |
| 3D Systems | 72.8 | Industrials | |
| Sonos | 72.1 | Consumer Discretionary | |
| Harmony Biosciences | 69.4 | Health Care | |
| Century Aluminum | 67.3 | Materials | |
| Proto Labs | 67.1 | Industrials | |
| Triumph Group | 67.1 | Industrials |
