The equity markets are off to a strong start in 2024. But does that mean it’s time to look at small-cap growth stocks? It may be, and here’s why.
As January comes to a close, the market rally has not yet spread to the small-cap sector. The small-cap Russell 2000 index is down 3.2% in January. And over the last 12 months, the index has been essentially flat, with only minor gains at any given time. Over the last five years, however, this index is up almost 30%. And historically, the beginning of a broad market rally is led by small-cap stocks.
Investors will also want to see valuations remain attractive. The price-to-earnings (P/E) ratio for the Russell 2000 index as of January 26, 2024, is 27.23x. That’s significantly lower than the 52.4x of just a year ago, but is still above pre-pandemic levels. Nevertheless, if you’re hunting for small-cap growth stocks right now, here are three names to consider.
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