Stock picks to buy, best 2021 small-cap growth picks from RBC – Business Insider

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  • RBC just updated its list of the highest-recommended small-cap stocks for the first quarter.
  • Small-company stocks have been on an enormous rally that included their best month ever in November.
  • Some experts say they still have a long way to go to catch up to the relative prices of large-caps.
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The smallest companies on Wall Street have had a remarkable run over the past few months, and they still have a long way to go to catch up with the stock market’s giants.

The companies with the largest market capitalizations ruled the world throughout the last bull market, which was historically long. But with a new cycle underway, a lot of experts think small- and medium-sized companies look more promising right now. It helps that after a bull market of more than a decade, they’re much less expensive.

That’s true even after the small-cap Russell 2000 index had its best month ever in November, followed by a very strong December, and kept right on going after that.

Even compared to a major index like the S&P 500, there are a lot of options in the small-company space. With that as a backdrop, RBC Capital Markets is updating its list of high-conviction small-cap ideas.

“The list is an opportunity to highlight companies that have either an attractive normalized growth story or strong durable growth characteristics,” the firm said.

Based on the views of 11 analysts, RBC lists 15 “Outperform”-rated companies valued at $5 billion or less. The group is highly optimistic about some names in the tech and healthcare sectors but also sees opportunities within the retail and financial sectors.

The stocks are ranked from lowest to highest based on how far they would have to rise to reach RBC’s 12-month price targets. Those upside figures were calculated using Thursday’s closing prices.

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