10 Small-Cap Growth Stocks to Buy Now

In a year when the major market indexes are struggling to put up gains, it might be time to take a closer look at smaller stocks with outsized growth prospects.

(Image credit: iStock)

In a year when the major market indexes are struggling to put up gains, it might be time to take a closer look at smaller stocks with outsized growth prospects. Historically, small-cap growth stocks have a low performance correlation to stocks with large market values, asset manager Federated Investors notes. They also tend to outperform stocks with big market caps over time, too.

Small-cap growth stocks have certainly paid off so far in 2018. The large-cap Dow Jones Industrial Average is off 3% for the year-to-date. But the small-cap growth benchmark Russell 2000 growth index is actually flat.

“What we love about small-cap growth stocks is that they are small businesses that constantly innovate and are creating their own demand,” writes Federated Kaufmann Fund (KAUAX (opens in new tab)) portfolio manager Stephen DeNichilo. “They are not reliant on market tailwinds. They create their own trajectory and are masters of their own universe.”

When we talk about small-cap growth stocks, we generally mean stocks with market values of between about $300 million and $3 billion. As for the growth part, the companies these stocks represent might be generating annualized sales gains of 30% or more. Naturally, expectations for outsized earnings growth are part of the equation too.

Here are 10 small-cap growth stocks to buy now. These 10 picks are smaller companies that have average analyst ratings of “Buy” or better. Several of these small-cap growth stocks that stood out are health-care names, but specialty chemicals, information technology and even veterinary services make appearances too. One thing they all have in common is that analysts are bullish on them at current levels.

Data is as of April 25, 2018. Companies are listed in alphabetical order. Analysts’ ratings provided by Zacks Investment Research. Click on ticker-symbol links in each slide for current share prices and more.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is a financial writer at Kiplinger, having joined the august publication full time in 2016.


A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.


Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.


In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics and more.


Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.


Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.