The Next Big Thing: Promising Small Cap Tech Stocks


Luis Leon Guerrero


May 22, 2024



Min Read

Technology stocks are once again in the spotlight, as demonstrated by the recent performance of the SPDR Technology ETF (XLK). Over the past week, the ETF has risen by 2.08%, and over the last month, it has surged by 10.31%. In comparison, the S&P 500 has gained 0.48% and 6.04% over the same respective periods. In this edition of Trading Central’s Fundamental Report, we will explore potential outperformers in the technology sector.

To identify opportunities, we will utilize Trading Central’s Strategy Builder and Fundamental Insight tools. Our focus will be on US-based small-cap technology stocks, specifically companies with market capitalizations between $250 million and $2 billion. These stocks often outperform their larger-cap counterparts. Additionally, we will refine our list to include stocks with a TC Quantamental Rating (TCQR) above 55 out of 100, indicating strong fundamentals relative to their industry peers.

Let’s explore deeper a few of the stocks in our screener and look at their TCQRs and individual factor scores:


Immersion Corp stands out with the top TCQR score of 77. This software firm has shown consistent expansion, with its market valuation rising by 9.70% in the last week and experiencing a 35.10% increase over the previous month.


Diebold Nixdorf showcases the penultimate lowest TCQR at 58 but has also experienced a remarkable surge of 36.5% in its stock value over the past month. 


MoneyLion, a 916.65 million dollar software company, currently has a TCQR of 64 and has comfortably outperformed the SPX over both time horizons provided. 


Karooooo, a company offering a cloud platform for on-the-ground operations, ranked second for the highest increase over the last five days, showing a significant rise of +7.40%. However, it has fallen behind its competitors over the past month, with only a modest increase of 6.60%.

Trading Central 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 18 percent annualized return compared with 13 percent for the S&P 500 index.

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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