Small Cap Gems: Uncovering Growth Plays with Trading Central's Tools

By

Luis Leon Guerrero

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June 26, 2024

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5

Min Read

In this week’s issue of the Fundamental Report, we're turning our attention to stocks that are currently riding the wave of strong momentum and growth, especially as the market navigates through the turbulent trading patterns recently observed with Nvidia. To uncover these standout performers, we will leverage the Strategy Builder and Fundamental Insights tools provided by Trading Central.

To identify outperformers, we will concentrate on small cap entities with a market cap ranging from $250 million to $2 billion. Our selection criteria will also include a Trading Central Quantamental Rating (TCQR) of at least 70, signifying outstanding fundamentals relative to their industry counterparts. Additionally, we will focus on stocks that have Momentum and Growth scores of 70 or above, ensuring that these companies have demonstrated significant earnings per share (EPS) and revenue growth in the recent quarter alongside highly positive investor sentiment.

Trading Central’s Strategy Builder provides a back-testing capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described had a 20-per-cent annualized return compared with 13 percent for the S&P 500 index.

In our screener of 10 companies, it's noteworthy that 40% are part of the asset management sector, while 20% belong to the metals and mining sector. Let's delve further into our screener and spotlight the leading 4 stocks.

HG:US

HG's Fundamental Signal

Hamilton Insurance Group, valued at $1.76 billion, currently tops our screener with an impressive TCQR of 87. The company also boasts high Growth and Momentum factor ratings of 91 each. Consequently, the stock is considered to have a “Bullish” fundamental signal, as per TC proprietary models. 

HG's Factor Scores

FSM:US

FSM's TCQR History

Fortuna Mining, a Canadian mining firm headquartered in Vancouver, has a respectable TCQR of 78, complemented by the highest Momentum Rating in our screener at 94. A key highlight for Fortuna is that its TCQR has been trending higher since February lows, reaching back to back highs in April and May.

FSM's Factor Scores

SUPV:US

SUPV's TCQR History

Grupo Supervielle, a small-cap bank with a market value of $785.34 million, boasts one of the highest Growth scores in our stock list at 96, alongside a Momentum score of 94. Its momentum score is at an all time high. Despite these impressive ratings, its TCQR is the lowest at 70 though trending higher since March 2024.

SUPV's Factor Scores

CION:US

CION's Fundamental Signal

CION Investment Corp, although one of the smaller companies in our screener, has been awarded a “Bullish” signal given, among other factors, its strong Growth and Momentum ratings of 93 and 91, respectively. Its growth score has been trending higher since June 2023.

CION's Factor Scores

Luis Leon Guerrero

Fundamental Analyst
Luis graduated from the University of Ottawa with a Bachelor of Commerce, specializing in Finance and has completed level 1 of the CFA. Luis participated in an international exchange program with the University of Chile in Santiago where he studied Strategic Alliances, Mergers & Acquisitions and Trends & Challenges in Latin American Markets. Luis joined Trading Central in 2021 as an Analyst to assist the team in stock picking, research and commodity futures/forex analysis.
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