In this article, we discuss the 10 small-cap stocks to buy according to billionaire Steve Cohen.
Billionaire investor Steve Cohen is the brain behind Point72 Asset Management, a hedge fund investing in high-growth sectors such as technology, services, healthcare, and consumer goods. Cohen also founded the global venture capital firm Point72 Ventures. As of the end of September 2021, Point72 Asset Management holds a portfolio value of approximately $23 billion.
According to the Q3 13F filings tracked by Insider Monkey, some of the biggest holdings in the portfolio of Point72 Asset Management at the end of September included Uber Technologies, Inc. (NYSE:UBER), Meta Platforms, Inc. (NASDAQ:FB), salesforce.com, inc. (NYSE:CRM), and Microsoft Corporation (NASDAQ:MSFT).
Between June and September 2021, Point72 Asset Management added 398 new stocks to its portfolio and purchased additional shares in 295 stocks. Point72 Asset Management also reported that 324 stocks were sold out by them in Q3 2021, while the hedge fund reduced its holdings in 253 stocks.
In this article, we will focus on the small-cap stocks to buy according to Steve Cohen.
Our Methodology
The stocks listed below were chosen from Steve Cohen’s Point72 Asset Management investment portfolio for the third quarter. These small-cap companies are operating in various industries such as biotech, cloud computing, healthcare, and manufacturing.
We picked these small-cap stocks included in Steve Cohen’s portfolio that have a market capitalization not higher than $3 billion.
Let’s now take a look at the 10 small-cap stocks to buy according to billionaire Steve Cohen.
Small-Cap Stocks to Buy According to Billionaire Steve Cohen
10. Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT)
Number of Hedge Fund Holders: 12
Market Cap as of January 9: $939 million
Biopharmaceutical company Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) is among the small-cap stocks to buy according to Steve Cohen. The California-based company develops and sells therapeutic medications for dermatological diseases such as psoriasis and atopic dermatitis.
After the firm filed its first drug application in plaque psoriasis, Mizuho analysts maintained a Buy rating on Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) with a price target of $58 on November 24. Additionally, during Q3, Steve Cohen upped his stake in Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) by 123% and the stock now accounts for 0.2% of his total holdings.
Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) shares increased 11.5% in the third week of November after the company disclosed data indicating that Arcutis’ proprietary cream, roflumilast, had similar moisturizing properties to a commercially marketed ceramide-containing moisturizer in adults with mild eczema.
At the end of the third quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $471 million in Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), compared to 13 in the preceding quarter worth $518 million.
Among the hedge funds being tracked by Insider Monkey, Frazier Healthcare Partners is a leading shareholder in Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) with 8.43 million shares worth more than $201 million.
9. CytomX Therapeutics, Inc. (NASDAQ:CTMX)
Number of Hedge Fund Holders: 14
Market Cap as of January 9: $254 million
CytomX Therapeutics, Inc. (NASDAQ:CTMX) is a clinical-stage biopharmaceutical company that develops therapeutic antibodies for cancer treatment. The California-based biotech firm is co-developing a potential drug candidate for cancer with some of the popular drugmakers in the world such as AbbVie Inc. (NYSE:ABBV), Amgen Inc. (NASDAQ:AMGN), and Astellas Pharma Inc. (OTC:ALPMY).
In the third quarter of 2021, Point72 Asset Management slashed its stake in CytomX Therapeutics, Inc. (NASDAQ:CTMX) by 2%. Yet, the hedge fund remains the largest shareholder of the biotech company holding 6.30 million shares of CytomX Therapeutics, Inc. (NASDAQ:CTMX) worth $32 million at the end of the September quarter.
In November, Kaveri Pohlman of BTIG kept his Buy rating on CytomX Therapeutics, Inc. (NASDAQ:CTMX) with a price target of $16 per share. Pohlman is optimistic about the company’s “unparalleled ability” to improve the therapeutic index of cytokines. The biopharmaceutical company ended Q3 with a strong cash position of $336 million.
According to Insider Monkey’s Q3 data, 14 hedge funds had stakes in CytomX Therapeutics, Inc. (NASDAQ:CTMX), compared to 17 in the second quarter of 2021. The total value of the holdings is $85.4 million.
8. Bicycle Therapeutics plc (NASDAQ:BCYC)
Number of Hedge Fund Holders: 15
Market Cap as of January 9: $1.5 billion
Bicycle Therapeutics plc (NASDAQ:BCYC) is a biopharmaceutical company that develops chemically synthesized medicines using bicyclic peptides. The company is innovating potential medication for cancer and diabetic macular edema. As of the end of the third quarter of 2021, Steve Cohen held 1.62 million shares of Bicycle Therapeutics plc (NASDAQ:BCYC) worth $67.2 million, representing 0.29% of his portfolio.
Although the drugmaker missed revenue estimates by $1.42 million, Bicycle Therapeutics plc (NASDAQ:BCYC) reported an EPS of -$0.59 in Q3 2021, beating estimates by $0.03. On December 17, SVB Leerink analyst Jonathan Chang initiated an Outperform rating on Bicycle Therapeutics plc (NASDAQ:BCYC) with a price target of $70 per share.
At the end of the September quarter, 15 hedge funds in the database of Insider Monkey held stakes worth $286 million in Bicycle Therapeutics plc (NASDAQ:BCYC), up from 12 in the preceding quarter worth $163 million.
Among the hedge funds being tracked by Insider Monkey, Tybourne Capital Management is a leading shareholder in Bicycle Therapeutics plc (NASDAQ:BCYC) with 1.96 million shares worth more than $81 million.
Just like Uber Technologies, Inc. (NYSE:UBER), Meta Platforms, Inc. (NASDAQ:FB), salesforce.com, inc. (NYSE:CRM), and Microsoft Corporation (NASDAQ:MSFT), investors and analysts are also following Bicycle Therapeutics plc (NASDAQ:BCYC).
7. VNET Group, Inc. (NASDAQ:VNET)
Number of Hedge Fund Holders: 16
Market Cap as of January 9: $1.3 billion
VNET Group, Inc. (NASDAQ:VNET) is a data center service provider based in China. The company offers hosting, cloud computing, IT infrastructure, and other value-added internet services. Steve Cohen increased his stake in the company during Q3 2021 by 25% to 1.51 million shares worth $26.2 million. VNET Group, Inc. (NASDAQ:VNET) represents 0.11% of Point72 Asset Management’s total holdings.
The Chinese tech company has a market cap of $1.3 billion and is working on growing its business by signing a joint venture to pursue development and investment opportunities in multiple build-to-suit hyper-scale data center projects in China.
At the end of the third quarter of the quarter, 16 hedge funds in the database of Insider Monkey held stakes worth $173 million in VNET Group, Inc. (NASDAQ:VNET), compared to 23 in the previous quarter worth $265 million.
Among the hedge funds being tracked by Insider Monkey, Bloom Tree Partners is a leading shareholder in VNET Group, Inc. (NASDAQ:VNET) with 2.8 million shares worth more than $48.5 million.
6. Caleres, Inc. (NYSE:CAL)
Number of Hedge Fund Holders: 17
Market Cap as of January 9: $860 million
Another small-cap stock in Steve Cohen’s portfolio is global shoe manufacturer Caleres, Inc. (NYSE:CAL). During the third quarter, Point72 Asset Management owned 539,313 shares of the company, comprising 0.05% of the fund’s holdings. The stake is valued at $11.9 million.
The Missouri-based footwear designer sells its company-owned shoe brands including Dr. Scholl’s Shoes and Naturalizer. The company also markets private-level athletic accessories and products from Adidas, Nike, Puma, and Converse to name a few.
Caleres, Inc. (NYSE:CAL) shares were up 5% on November 18 after the company beat earnings and revenue estimates in Q3 2021. The shoemaker reported an EPS of $1.54 and total revenue of $784 million in the period. In addition, the company’s inventory levels grew 7.1% year over year.
Laura Champine of Loop Capital anticipates an improving growth trend for Caleres, Inc. (NYSE:CAL) into early FY 2022 following a rebound in the company’s Famous Footwear segment in Q3. Champine increased her price target for the stock to $40 from $35 while maintaining a Buy rating on the shares on November 19.
At the end of the third quarter of the quarter, 17 hedge funds in the database of Insider Monkey held stakes worth $76 million in Caleres, Inc. (NYSE:CAL), compared to 18 in the previous quarter worth $81 million.
Owning 597,952 shares of Caleres, Inc. (NYSE:CAL) worth $13 million at the end of the third quarter of 2021, Portolan Capital Management is the largest shareholder of the shoe company.
Caleres, Inc. (NYSE:CAL) is among the notable stocks in Steve Cohen’s portfolio along with Uber Technologies, Inc. (NYSE:UBER), Meta Platforms, Inc. (NASDAQ:FB), salesforce.com, inc. (NYSE:CRM), and Microsoft Corporation (NASDAQ:MSFT).
5. JFrog Ltd. (NASDAQ:FROG)
Number of Hedge Fund Holders: 20
Market Cap as of January 9: $2.7 billion
JFrog Ltd. (NASDAQ:FROG) provides a DevOps platform that assists clients with software release and update management. The company’s products and services are integrated into different platforms such as AWS, Slack, Netflix, and Google.
The tech company’s revenue in the third quarter was $53.7 million, a 38% increase year over year, and beat estimates by $1.2 million. During the third quarter, JFrog Ltd. (NASDAQ:FROG) saw a 49% increase in customers with more than $100,000 ARR to 466 and a 56% increase in customers with more than $1 million ARR to 14 customers.
Between June and September, Point72 Asset Management held 559,443 shares of JFrog Ltd. (NASDAQ:FROG). Similarly, a total of 20 hedge funds reported owning stakes in JFrog Ltd. (NASDAQ:FROG) at the end of the third quarter of 2021, up from 12 in the preceding quarter. Ashe Capital is the biggest stakeholder of the company.
On December 9, Stifel analyst Brad Reback upgraded JFrog Ltd. (NASDAQ:FROG) to Buy from Hold and set a price target of $45 for the stock.
4. Protagonist Therapeutics, Inc. (NASDAQ:PTGX)
Number of Hedge Fund Holders: 21
Market Cap as of January 9: $1.7 billion
Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is a clinical-stage biotech company that develops peptide-based medications. The California-based pharmaceutical company is collaborating with Johnson & Johnson’s (NYSE:JNJ) Janssen Biotech on a potential oral medication for psoriasis and irritable bowel disease. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) will begin a phase 2 clinical trial for oral interleukin-23 (IL-23) antagonist in early 2022.
Protagonist Therapeutics, Inc. (NASDAQ:PTGX) delivered a better-than-expected revenue of $10.3 million in the third quarter of 2021, beating estimates by $8.5 million.
As of the end of Q3 2021, Point72 Asset Management is the biggest shareholder of Protagonist Therapeutics, Inc. (NASDAQ:PTGX). Steve Cohen upped his stake in Protagonist Therapeutics, Inc. (NASDAQ:PTGX) between June and September by 280%, bringing his total shares to 4.38 million worth $77.7 million. The biotech company represents 0.34% of Point72 Asset Management’s total holdings.
Overall, 21 funds of the 867 elite funds tracked by Insider Monkey reported owning stakes in Protagonist Therapeutics, Inc. (NASDAQ:PTGX) at the end of September 2021. Meanwhile, on November 15, JMP Securities analyst Gobind Singh maintained an Outperform rating on Protagonist Therapeutics, Inc. (NASDAQ:PTGX) and raised his price target for the stock to $70 from $60.
3. Alphatec Holdings, Inc. (NASDAQ:ATEC)
Number of Hedge Fund Holders: 24
Market Cap as of January 9: $1.12 billion
Alphatec Holdings, Inc. (NASDAQ:ATEC), a medical technology company, is one of the small-cap stocks in Steve Cohen’s portfolio in Q3 2021. Point72 Asset Management increased its position in Alphatec Holdings, Inc. (NASDAQ:ATEC) by 946% between June and September. The total value of Cohen’s stake in the California-based company is $37.3 million.
Alphatec Holdings, Inc. (NASDAQ:ATEC) develops and manufactures advanced technologies and systems used in spinal surgery. Alphatec Holdings, Inc. (NASDAQ:ATEC), founded in 1990, is one of the medical device companies capitalizing on the $6.7 billion spinal fusion device market in the United States.
The company’s third-quarter revenue grew 53% year on year to $63 million. Alphatec Holdings, Inc. (NASDAQ:ATEC) provided a positive revenue outlook for fiscal 2021 of approximately $235 million, representing a 62% increase.
At the end of September 2021, 24 funds out of the 867 tracked by Insider Monkey had stakes in Alphatec Holdings, Inc. (NASDAQ:ATEC), up from 18 in the previous quarter. Deerfield Management is the largest shareholder of Alphatec Holdings, Inc. (NASDAQ:ATEC) as of Q3 2021, owning 3.59 million shares of the medical device company. The total value of this stake is $43.8 million.
2. Bandwidth Inc. (NASDAQ:BAND)
Number of Hedge Fund Holders: 26
Market Cap as of January 9: $1.6 billion
Cohen boosted his holdings in the North Carolina-based firm by 110% between June and September, raising the total number of shares held by Point72 Asset Management to 596,204, making the hedge fund Bandwidth Inc.’s (NASDAQ:BAND) largest shareholder.
Microsoft, Uber, Zoom, and Google are some of the network companies that leverage Bandwidth Inc’s (NASDAQ:BAND) application programming interfaces (APIs) to integrate communications into software and apps.
Bandwidth Inc’s (NASDAQ:BAND) revenue increased 54% to $130.6 million in the third quarter of 2021, up from $84.8 million the previous year. Bandwidth Inc. (NASDAQ:BAND) stated in its third-quarter results report that it had signed a new contract with a $16 billion Fortune 200 managed care provider.
On November 9, Needham analyst Ryan Koontz maintained a Buy rating on Bandwidth Inc. (NASDAQ:BAND) with a price target of $130.
1. PagerDuty, Inc. (NYSE:PD)
Number of Hedge Fund Holders: 30
Market Cap as of January 9: $2.74 billion
Cloud computing firm PagerDuty, Inc. (NYSE:PD) offers businesses real-time incident response and on-call management. Cohen purchased 1.21 million shares of PagerDuty, Inc. (NYSE:PD) for $50.26 million in the third quarter of 2021, representing 0.22% of his total holdings.
Craig-Hallum analyst Chad Bennett maintained a Buy rating on PagerDuty, Inc. (NYSE:PD) and set a price target of $52 for the stock on December 8.
You can also take a look at the 10 Dividend Stock Picks of Ira Unschuld’s Brant Point Investment and 10 Tech Stocks to Buy According to Former VP Al Gore.
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Disclosure. None. 10 Small-Cap Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.
