We recently published a list of 10 Small-Cap Stocks Jim Cramer is Talking About Amid Latest Market Rotation. Since SPS Commerce Inc (NASDAQ:SPSC) ranks 5th on the list, it deserves a deeper look.
Earlier this month Jim Cramer talked about the rally in the small-cap-heavy Russell 2000 Index, saying these kinds of rebounds show you have to “stay invested” in the market to make “big money.”
“When I say stay in I mean you have to be as invested as you possibly can be so you don’t miss monster moves.”
Cramer said the Russell 2000 index rally was led by several “oddball” stocks that many people aren’t aware of.
“The biggest winners in the Russell today are all the companies I either don’t know or I barely heard of. You know I know thousands of stocks!”
Cramer highlighted that almost half of the stocks rising in the Russell 2000 index were biotech or healthcare companies that are losing money. Cramer believes these companies might be worth something only “years from now” and called them “risky” stocks.
Jim Cramer talked about what he called “small- and medium-sized businesses” which he believes can benefit from two possible developments in the near term: a Trump win in the election and rate cuts. A Donald Trump presidency, according to Cramer, could provide a level-playing field for these small companies which often get left behind by major companies amid tough regulation. Since Trump is expected to decrease regulations if he comes to power, these small companies could thrive in this new environment. Cramer said that money is coming from the “sidelines” as investors begin to invest in stocks instead of hoarding cash to earn interest income.
Cramer has been talking about several small-cap stocks in his programs lately. In a recent program, he mentioned several small-cap stocks that were moving recently and briefly discussed their businesses. We picked these stocks and analyzed their fundamentals and growth potential. We also mentioned hedge fund sentiment around these stocks. Why are we interested in the stocks that hedge funds pile into? 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).
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SPS Commerce Inc (NASDAQ:SPSC)
Number of Hedge Fund Investors: 28
Supply chain management software company SPS Commerce Inc (NASDAQ:SPSC) is one of the notable small-cap stocks Jim Cramer talked about recently.
Jim Cramer talked about the latest stock movement and said “no thanks” to the stock.
Amid rising e-commerce sales all over the world, SPS Commerce Inc (NASDAQ:SPSC) has growth prospects because its solutions connect retailers, suppliers and carriers. SPS Commerce Inc (NASDAQ:SPSC) has 120,000 customers and 12,000 drop-ship connections. The company posted about 18% revenue growth in the second quarter year over year. For the full year, it expects revenue growth of 16% to 17% over last year. SPS Commerce Inc (NASDAQ:SPSC) is also expanding via acquisitions. It recently announced to buy Traverse Systems, an SaaS platform provider offering retailers and suppliers a unified view of their supply chain performance, for about $29.3 million. Traverse Systems is expected to contribute $5 million in revenue by 2025.
Overall, SPS Commerce Inc (NASDAQ:SPSC) ranks 5th on Insider Monkey’s list titled 10 Small-Cap Stocks Jim Cramer is Talking About Amid Latest Market Rotation. While we acknowledge the potential of SPS Commerce Inc (NASDAQ:SPSC), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SPSC 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.
