US Small-Cap Stocks: Opportunities and Risks

The U.S. stock market has recently posted gains, encouraging investors to consider small-cap stocks with strong fundamentals and growth prospects. Companies like Daily Journal Corporation are highlighted for robust financial performance, while others such as Udemy, Hillman, and Accel Entertainment face challenges from weak demand and stagnant sales. Value and cash-producing stocks including Tennant, Stanley Black & Decker, Bandwidth, and ON24 are approached with skepticism due to slow revenue growth and structural limitations. The report stresses that not all seemingly undervalued stocks are good investments, as many contend with persistent fundamental issues. Investors are advised to conduct thorough research to discern genuine opportunities from potential value traps. Overall, the small-cap sector in the U.S. presents both promising prospects and significant risks.