Small and mid-cap stocks are expected to get a boost as the Federal Reserve cuts interest rates, and Oppenheimer named some of his favorite stocks in the space. As the Federal Reserve begins its rate-cutting cycle, smaller stocks that are more sensitive to rising borrowing costs are expected to rebound and outperform. The small-cap benchmark Russell 2,000 index’s 8% gain in 2024 still lags the S&P 500’s roughly 19% gain. However, Oppenheimer believes there is further upside for these names. “While the S&P 600 and Russell 2000 remain below their July highs and 2021 highs, these small-cap benchmarks continue to defend support and maintain bullish trends,” the firm wrote in a note on Monday. Oppenheimer Mo has listed its top picks with market capitalizations between $1 billion and $10 billion. Here are the names of some of these companies, all of which the firm rates as Outperform. Analyst Timothy Horan said ISP Cogent Communications is an undervalued beneficiary of artificial intelligence. “We believe the company has valuable unrecognized assets in (Internet Protocol Version 4) data center power/space and fiber that should be consolidated and begin monetizing by year-end,” Horan said. The analyst added, The stock offers a 5% dividend yield and healthy – albeit “unstable” free cash flow growth. To be sure, shares are up just 1.1% so far this year. Horan’s stock price target is $90, which implies 17% upside potential from Monday’s closing price. CCOI YTD Mountain Cogent Communications 2024 Healthcare Services Stock Chemed is another of Oppenheimer’s favorite stocks. Chemed has two divisions: Vitas Healthcare, a hospice care provider company, and Roto-Rooter, a pipe and drain cleaning company. Analyst Michael Wiederhorn said the portfolio “offers an attractive mix of diversification and growth.” Wiederhorn believes Chemed is well-positioned to benefit from the aging population trend. “Vitas’ growth trend is above historical levels primarily due to favorable demographics, strong market share gains and recovery from pandemic lows,” he wrote. “With a clean balance sheet, strong With strong cash flow and attractive growth prospects, we believe Chemed remains an attractive stock over the next 12-18 months. Year-to-date, shares are down about 1%. Wiederhorn’s price target of $650 implies a 12.5% upside from Monday’s closing price. Oppenheimer said CHE YTD mountain Chemed 2024 is one way for small investors to get exposure to the growth in sports betting, through Genius Sports. Based on Oppenheimer’s $10 price target, the online sports betting (OSB) data provider’s stock could soar more than 37%. Analyst Jed Kelly said: “GENI has become a major player in the US OSB space after extending its partnerships with the National Football League and Football DataCo until 2028 and 2029 respectively. Pro sports leagues can also use online sports betting to boost fan engagement, he noted. Shares of Genius Sports are up about 18% so far this year. —CNBC’s Michael Bloom contributed to this report.
Oppenheimer says a group of smaller stocks are poised for big gains | Real Time Headlines
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