We recently published a list of the Top 10 Small Cap Stocks to Buy with the Highest Upside Potential. In this article, we are going to take a look at where Bridge Investment Group Holdings Inc. (NYSE:BRDG) stands against other top small cap stocks to buy with the highest upside potential.
What Would 2025 Look Like for Small Cap Stocks?
On December 30, MJP Wealth Advisors chief investment officer Brian Vendig appeared on Yahoo! Finance’s Catalysts to discuss the potential outlook of small cap stocks in 2025. He said that as long as the economy stays stable and policy decisions are not taken to the extreme, small cap stocks could see the perfect environment to outperform in 2025. However, a little cooperation from the Fed is essential to maintaining this perfect environment.
He also believed that the market is likely to come back to earnings. Vendig explained that the market is expected to be choppy in the first few months of 2025. This trend is likely to materialize throughout the first half of 2025, with the choppiness attributed to policy uncertainties. But Vendig believed that if earnings remain intact, he will likely stay constructive on stocks. He even thinks that bonds might be a good opportunity as well. He said:
“I’m definitely not one to recommend to add to megacap tech at this point, but I think taking a look at some of those value-oriented sectors that help to play into innovation and growth for the economy still makes sense.”
He also highlighted that potential opportunities may emerge in the industrial sectors, such as infrastructure, electric grid enhancements, and power generation, along with some in pharmaceuticals and biotech.
Will the Fed and Incoming Trump Administration Bolster Small Cap Stocks?
Several other analysts have similar predictions as Vendig’s. On December 24, Global Advisors’ managing partner, Tom Lee, appeared on CNBC and highlighted the potential of small and mid-cap stocks in 2025, saying that this year will likely be a positive one for these companies. He reasoned that the incoming Trump administration and interest rate cuts are likely to make companies more expansionary, boosting their confidence regarding mergers. He even said that small caps may outperform by more than 100% in the coming years.
Our Methodology
We used the Finviz stock screener to compile a list of 30 small cap stocks. We then selected the top 10 stocks with the highest analyst upside potential as of January 9, 2025. We have also included the market capitalization of the stocks as of the same date. The list is sorted in ascending order of analysts’ average upside potential. These stocks are also popular among elite hedge funds as of fiscal Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small cap and large cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Bridge Investment Group Holdings Inc. (NYSE:BRDG)
Analyst Upside: 49.66%
Market Cap: $880.28 million
Number of Hedge Fund Holders: 14
Bridge Investment Group Holdings Inc. (NYSE:BRDG) is a real estate investment firm. It combines its platform with investment professionals in select US real estate verticals, including affordable housing, multifamily, seniors housing, development, office, and logistics properties.
Real estate prices are showing signs of stabilization in the US, with major indices turning positive in 2024. Bridge Investment Group Holdings Inc.’s (NYSE:BRDG) portfolios were also positive for fiscal Q3 2024. However, the impact of increased transaction volumes and an improving debt market has just started to materialize in the market. Therefore, the company expects meaningful volumes and valuation improvements in the coming quarters.
Bridge Investment Group Holdings Inc. (NYSE:BRDG) was also selectively active in deploying capital in fiscal Q3 2024. It acquired $349 million of multifamily and workforce assets at attractive cap rates and $40 million of logistics assets. It deployed $966 million of capital in its debt strategies vertical, which included meaningful recycling of investments. The company expects its deployment opportunities to increase over the next several quarters, leading to positive analyst sentiments regarding the stock.
Overall, BRDG ranks 6th on our list of top 10 small cap stocks to buy with the highest upside potential. While we acknowledge the potential of small cap stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BRDG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
