In recent sessions, small-cap stocks have been gaining ground. However, there are still a number of names trading at a significant discounted price.
These stocks are even more attractive ahead of Trump’s inauguration, which takes place on January 20 .
Why? Why?
Here are the top three small-cap stocks you can buy at a discount.
Bath & Body Works Inc (NYSE: BBWI)
Bath & Body Works has seen a strong uptrend in the last two months, but TD Cowen analysts still see it rising through 2025.
The investment firm recently dubbed small-cap specialty retailer as an “underappreciated tale” because it is well positioned to grow its earnings on the backs of continued expansion outside shopping malls.
Analyst Jonna Kim believes that BBWI will benefit from marketing initiatives as well as the loyalty program.
In a recent research report, she said that the “candles and sanitizers category overhang” is beginning to subside and that international sales are becoming less of a drag.
Kim called Bath & Body Works the best investment for 2025, in her note to clients. It was undervalued compared with its growth and margin profile.
Alaska Air Group Inc (NYSE: ALK)
Morgan Stanley analyst Ravi Shanker has named Alaska Airlines as a top pick in 2025, despite the fact that it has already more than doubled since early August.
In a client note, he said that the $1.9 billion purchase of Hawaiian Airlines by the company last year would serve as a catalyst for growth in the long run.
We are excited about this opportunity that has arisen from the HA Integration, which has transformed both Airlines into a new intercontinental mainline carrier.
Shanker is a fan of Alaska Airlines’ shares at their current levels, not only because the small-cap carrier will have much easier comps in this year but also due to a large $1.0 billion buyback that has been planned.
Academy Sports and Outdoors Inc. (NASDAQ: ASO).
Academy Sports and Outdoors has lost 30% of its value since March 2024, which is different than the other two stocks on this list.
Citi analyst Paul Lejuez says that the small-cap sporting goods chain now offers a favorable risk-reward ratio, making its shares worth purchasing this year.
In a recent report, he said that he saw signs of comps pressure easing in F25 due to a recovery in pandemic categories and a tailwind coming from new stores joining the comp base.
Lejuez believes that there is significant room to grow square footage in the future, which he believes will unlock additional sales potential for ASO by 2025.
This post Top 3 small cap stocks to buy before Trump’s inauguration first appeared on The ICD
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