Small cap stocks are an attractive and often lucrative opportunity for investors due to their potential to outperform their larger counterparts. These smaller companies possess several advantages over the big players, including significant room for growth, agility, and the potential to house undervalued assets. Small caps ability to deliver substantial returns as they capitalize on expansion opportunities, adapt swiftly to changing market dynamics, and reveal hidden gems that often go unnoticed in the broader investment landscape make them a go-to for many looking to make gains. Below we explore five small cap companies that have not only doubled their stock prices in 2023 but also showcase the promise these investments hold.
1. Prometheus Biosciences (Ticker: PRMS)
Year-to-date Growth: 117%
Prometheus Biosciences is a clinical-stage biotechnology company with a focus on developing precision medicines for the treatment of cancer and various diseases. Their leading drug candidate, PRA023, is a monoclonal antibody designed to target the CD26 antigen, which is overexpressed in many types of cancer cells.
The company gained substantial attention when it announced positive Phase 2 results for PRA023 in December 2022, demonstrating its safety and efficacy, particularly in patients with pancreatic cancer. The drug is currently in Phase 3 trials for pancreatic cancer and Phase 2 trials for other cancer types.
2. Akero Therapeutics (Ticker: AKRO)
Year-to-date Growth: 110%
Akero Therapeutics is a clinical-stage pharmaceutical company dedicated to developing treatments for non-alcoholic steatohepatitis (NASH), a severe liver disease that can lead to cirrhosis and liver cancer. Their primary drug candidate, efruxifermin (EFX), is a fusion protein targeting the fibroblast growth factor 21 (FGF21) pathway, a key regulator of metabolism and inflammation.
In June 2023, Akero's announcement of positive results from its Phase 2b study of EFX, particularly its improved patient outcomes when combined with a GLP-1 receptor agonist, fueled its growth. EFX is currently in Phase 3 clinical trials for NASH.
3. Ardelyx (Ticker: ARDX)
Year-to-date Growth: 108%
Ardelyx is a pharmaceutical company specializing in treatments for kidney diseases and hyperphosphatemia, a condition characterized by elevated blood phosphorus levels. Elevated phosphorus levels can lead to complications like heart disease and bone issues in patients with kidney disease. Ardelyx's lead drug candidate, tenapanor, is an oral small molecule that inhibits the sodium/phosphate co-transporter 2 (SGLT2) protein, which plays a crucial role in phosphate reabsorption.
The FDA's approval of tenapanor for hyperphosphatemia treatment in adults with chronic kidney disease in December 2022 was a significant milestone for the company.
4. Snowline Gold (Ticker: SGD)
Year-to-date Growth: 107%
Snowline Gold is an exploration and development company primarily focused on gold projects in North America. Their flagship project, the Einarson Gold Project in Nevada, is an exceptionally high-grade gold deposit with the potential to produce over 1 million ounces of gold annually.
In March 2023, Snowline Gold announced a definitive merger agreement with Northern Star Resources, a gold mining company with operations in Australia and North America. The impending merger, set to close in the fourth quarter of 2023, is expected to further bolster Snowline Gold's prospects.
5. Nordic American Tankers (Ticker: NAT)
Year-to-date Growth: 106%
Nordic American Tankers operates a fleet of crude oil tankers, responsible for transporting crude oil from production regions to consumption regions across the globe. The sharp increase in crude oil prices in 2023, largely influenced by the Ukraine conflict and other geopolitical factors, has significantly heightened the demand for crude oil tankers.
This surge in demand has propelled Nordic American Tankers' stock price. The company is capitalizing on the favorable market conditions by expanding its fleet through acquisitions and new tanker constructions.
In Conclusion...
Small-cap stocks have proved that their potential to outperform larger counterparts is more than just a theory. These companies, with their room for growth, agility, and often undervalued assets, have offered investors an exciting opportunity for substantial returns. As the investment landscape continues to evolve, small-cap stocks will remain a focal point for those seeking to uncover the next big opportunities in the market. Investors willing to do their research and take calculated risks can potentially reap the benefits of small-cap growth.
