10 Best Small-Cap Stocks to Buy Before They Explode

5. Scorpio Tankers Inc. (NYSE:STNG)

Market Capitalization: $1.96 Billion

Analyst Upside Potential: 72.59%

Number of Hedge Fund Holders: 32

Scorpio Tankers Inc. (NYSE:STNG) is a Monaco-based company specializing in the seaborne transportation of refined petroleum products and crude oil. It operates a fleet of tankers, including LR1, LR2, Handymax, and Medium Range vessels.

On February 17, Evercore ISI analyst Jonathan Chappell maintained a Buy rating on the stock with a price target of $64. During the fiscal fourth quarter of 2024, Scorpio Tankers Inc. (NYSE:STNG) generated $105 million in adjusted EBITDA and $30 million in adjusted net income. Moreover, the company also reduced its debt by $740 million by expanding revolving debt capacity, and lowered daily cash breakevens to $12,500 per day, thereby strengthening the balance sheet.

Looking ahead, Scorpio Tankers Inc. (NYSE:STNG) expects refined product demand to increase by nearly 1 million barrels per day in 2025. It expects 2 million barrels of refining capacity to close this year, as older refineries struggle to compete with newer, cost-efficient facilities in regions like the Middle East and Asia. This shift will lead to increased imports and ton-mile demand as lost production is replaced. It is one of the best small cap stocks to buy before they explode.