The index of small-cap stocks is a good investment to explore the exciting world of small-cap-investing.
The COVID-19 pandemic has dominated most of the year, especially the first half of 2020. Due to the diminishing economic situation, premium investors have turned to large-cap stocks, heavily betting on the tech industry.
S&P 500 performed better this year compared to the iShares Russell 2000 ETF that is down by 8% since the beginning of this year.
Despite that, several Russell 2000 stocks have done well. And, since Election day, the stock market has picked up momentum. With things getting better, small-cap stocks have outperformed their larger counterparts in November.
Investing in the Russell 2000 index provides a variety of small-cap stocks with promising potential. It’s a great way to explore the exhilarating world of small-cap stocks. Here are the three best Russell 2000 stocks to buy.
Teladoc Health (TDOC)
The telehealth giant, Teladoc Health is one of the most compelling stocks in its sector. Back in August, TDOC stock soared to its all-time high at $253. However, at the moment, it’s trading just under $200 per share.
Teladoc during the third quarter has recorded an astonishing growth, with revenue skyrocketing by $109% to $288.8 million. While the total visits of patients increased by a stunning 206%. For the first three quarters of 2020, TDOC’s revenue has soared by 80% to $710.6 million.
Teladoc has had a good Q4 and the revenues are expected to increase continuing the bullish momentum from Q3.
Recently, Motley Fool author, Danny Vena namedTeladoc stock among the ‘3 Surefire Growth Stocks to Buy Before 2021.’ Vena believes that Teladoc will capitalize on the evolving telemedicine market. The company has strong exponential revenue growth. Moreover, its recent acquisition of chronic-care specialist Livongo will be a major catalyst that will help the company in the future.
Rocket Pharmaceuticals (RCKT)
Rocket Pharmaceuticals (RCKT) has a market cap of $3.42 billion and is one of the promising Russell 2000 stocks with possible growth in thelong-term. The stock has recorded consistent growth over the past few years now. The long-term momentum is also bullish considering the catalysts in the market.
The pharmaceutical firm is a clinical-stage drug producer that develops gene therapies for cardiac, rare blood, bone, and other diseases. In October 2020, the company presented the data from its leukocyte adhesion deficiency-1 program which showed encouraging results.
Bank of America’s analysts, Greg Harrison said that the deficiency-1 program reflects a comparatively little part of Rocket’s bullish outlook. However, it defines a significant approach of the company towards its gene therapies. Few other catalysts willhelp RCKT stock to continue bullish momentum in the coming year, including promising initial data from Phase 1 of the Danon disease study.
Bank of America rates the stock as a buy.
Cal-Maine Foods (CALM)
The largest shell egg producer in the United States stand a fair of investment in the holidays period. Cal-Maine Foods (CALM) is forecasted to be one of the prominent Russell 2000 stocks with its egg demand increasing as people stay at home.
Historically, the holiday period has always been a strong booster for the company. According to the analyst Peter Galbo, Cal-Maine shares are tempting and are valued at 1.75 times book value. This reflects up to 20% of the discount to CALM’s long-term average.
The price target from Bank of America is around $47 for Cal-Maine stock and is a buy going ahead into 2021.