Small-Cap Superstars: 3 Stocks Packing a Massive Punch for Your Portfolio

Stocks to buy

Small-cap typically refers to stocks trading at or below $2 billion in market cap. These companies may have recently begun trading publicly or haven’t been able to scale their business to garner greater market share.

Investors should seek to gain some exposure to small-cap companies due to increased diversification and the ability to profit from a new business’s initial success.

Below are three small-cap stocks that have started trading publicly within the last 10 years. They have given investors outstanding returns, especially within the last year, and are poised for continued growth.

NewLake Capital Partners (NLCP)

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NewLake Capital Partners (OTCMKTS:NLCP) supplies the regulated cannabis industry with real estate properties for use as dispensaries and cultivation facilities, typically in the form of triple-net leases. NLCP owns and operates approximately 31 real estate properties.

Over the past year, its share price has increased by 58% due to changes in regulation regarding the cannabis industry and strong earnings results.

On May 9, NLCP reported earnings for the first quarter of 2024, which stated that total revenue increased by 10% and net income rose by 17% year-over-year (YOY). NLCP also announced it purchased a new cultivation facility in Connecticut.

NLCP has a solid dividend yield of 8.56%. Its most recent quarterly distribution, 41 cents per share, was paid to investors on April 15.

In late April, the U.S. Drug Enforcement Administration (DEA) announced it would reclassify marijuana from a Schedule I drug to a Schedule III.

NLCP has reported strong earnings growth for the first quarter, which beat analyst expectations, and marijuana’s reclassification opens an opportunity for growth in the cannabis industry.

Limbach Holdings (LMB)

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Limbach Holdings (NASDAQ:LMB) primarily operates as a general contracting and owner-direct company that provides construction and renovation projects, such as mechanical, electrical and plumbing services. It serves facilities like sports arenas, entertainment facilities, warehouses, colleges, amusement parks and data centers.

Over the past year, its share price has risen by 150% due to decent earnings results and the growing need for its services.

On May 8, LMB reported earnings for the first quarter of 2024, which stated that gross profit increased 19% and net income more than doubled to $8 million compared to the year before. The company reiterated its guidance for the full year 2024, with expected revenue between $510 and $530 million.

LMB is beginning to shift to a more direct owner-relationship model, leading to increased profitability in its general contracting services. It offers investors potential upside and continued growth capabilities.

Blue Bird (BLBD)

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Blue Bird (NASDAQ:BLBD) is a school bus manufacturer primarily serving the state government and various service centers. It produces dismal-powered buses along with other alert native power options, including gasoline, electric, propane, and compressed natural gas.

On May 8, BLBD reported earnings for the second quarter of 2024, stating that total revenue increased by 15% compared to the previous year and net income increased from $7 million in Q2 2023 to $26 million.

Its share price has increased by over 150% in the last six months, primarily due to its most recent earnings report, surprising investors and analysts alike.

Electric bus sales also saw a massive shift, with total sales increasing by 56% YOY. Blue Bird now has a backlog of approximately 500 orders. The large increase in electric bus sales was due to the U.S. Environmental Protection Agency (EPA) initiating the Clean School Bus Program, passed into law in 2021, aiming to replace diesel-powered buses with electric alternatives.

Blue Bird is a stock that could continue trading higher due to its impressive earnings growth and skyrocketing electric bus sales.

As of this writing, Noah Bolton held a long position in BLBD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with
topics such as the stock market and financial news.

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