Big-cap stocks like Nvidia (NVDA) and Palantir (PLTR) steal much of the attention. But now investors are scoring massive gains on small caps not in the S&P 500.
Seven small stocks in the iShares Russell 2000 ETF (IWM), including cancer treatment company The Oncology Institute (TOI), mortgage firm Better Home & Finance (BETR) and used apparel seller ThredUp (TDUP), jumped more than 400% this year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
What’s Happening With Small Caps
Small caps are only just now picking up steam. The iShares Russell 2000 ETF is up 11.2% this year. That lags the S&P 500. But momentum is building on small-stocks’ side.
On Sept. 18, the Russell 2000 closed at an all-time high for the first time since March 15, 2021, says Bespoke Investment Group. “The new high ended a streak of 967 trading days without closing at a new high and ranked as the second longest in the index’s history,” Bespoke said. “The longest streak ended on Nov. 10, 2004 at 1,177 trading days.”
Many small caps started the year with low per-share prices. That means even a small dollar gain can create a huge percentage rise. Take Oncology Institute. The money-losing firm runs 62 clinics in five states. It entered the year trading for just 31 cents a share. It’s now up to $3.60 a share for a 1,064% rise.
Oncology remains a highly speculative stock. Its EPS Rating is just 19. And the market value just $340 million. But analysts do think losses will shrink in 2025 and 2026.
Other Big Small-Cap Winners
ThredUp is a much more substantial company. The buyer and seller of used apparel is valued north of $1.1 billion. It too loses money. Analysts think ThredUp will lose 24 cents a share this year.
But investors don’t seem to mind much. Shares of ThredUp gained 578% this year. The stock now trades for $9.44 a share.
To be fair, many of the small-cap stocks have share prices too low to be key buys. But that’s changing fast as the small stocks rally. The average stock in the Russell 2000 index now trades for $37 a share.
We’ll see if small caps can grow into a more important part of the market.
Top Russell 2000 Stocks
Based on percentage gains this year in iShares Russell 2000 index
Company Ticker YTD Ch. The Oncology Institute TOI 1,064.4% Better Home & Finance Holding BETR 602.6% ThredUp TDUP 578.1% Oklo OKLO 492.1% Palvella Therapeutics PVLA 438.8% Centrus Energy LEU 412.6% NioCorp Developments NB 403.9%
Source: S&P Global Market Intelligence
Follow Matt Krantz on X (Twitter) @mattkrantz
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