In recent times, the potential of small and mid-cap stocks has been a topic of interest among investors and financial analysts alike. According to Tom Lee, managing partner at Global Advisors, 2025 is expected to be a good year for small and mid-cap stocks. This optimistic outlook can be attributed to several factors, including:
- Interest Rate Cuts: The reduction in interest rates will likely lead to an expansionary economy, where companies feel confident about mergers and acquisitions.
- Incoming Administration: The change in administration is expected to bring about a shift in policy that could favor small-cap stocks.
- P/E Multiple of 10: Small-cap stocks are trading at a discount with a medium P/E multiple of 10, making them an attractive investment option.
New Street Advisors CEO Delano Saporu shares similar sentiments, believing that small-cap stocks are well-positioned to outperform in 2025. The economy has shown resilience in 2024, particularly the recovery in the last quarter, which signals a promising outlook for businesses. Additionally, Donald Trump’s win has already driven significant gains in small-cap stocks due to the growing enthusiasm around potential easing of regulations on businesses.
Small-cap stocks are conventionally focused on the domestic market, with less exposure to international trade compared to large-cap counterparts. Therefore, Trump’s tariff policies will not have a major impact on small-cap stocks compared to large-cap stocks.
Exploring the Best Penny Stocks to Buy in 2025
If you’re interested in exploring the best penny stocks to buy in 2025, we recommend visiting our article on the 10 Best Penny Stocks to Buy for 2025.
US Stock Market Outlook for 2025
Heading into 2025, the US stock market is expected to deliver a second consecutive year of impressive gains. The S&P 500 index surged more than 25% in 2024, while the tech-heavy Nasdaq 100 jumped up to 28%. The Russell 2000 index, which covers small-cap companies, soared more than 15% over the last year, and the Dow Jones U.S. Small-Cap Index has risen by 18%.
Economic Outlook for 2025
Torsten Slok, economist at Apollo Global Management (APO), released his 2025 economic outlook for the US. According to Slok, the US economy will deliver strong results with no signs of major slowing in 2025. Slok added that interest rates will likely stay ‘higher for longer’ despite the Fed’s current interest rate-cutting cycle.
The US economy is expected to register GDP growth of 2.2% in 2025, signaling a modest growth driven by less restrictive monetary policy, resilient consumer spending, and a steadying labor market.
Why Elevation Oncology, Inc. (NASDAQ:ELEV) Is Among the Best Penny Stocks To Invest In According to Media?
Elevation Oncology, Inc. (NASDAQ:ELEV) is a US-based oncology company that is engaged in the development of targeted therapeutics for cancer treatment. The company’s specialty lies in selective cancer therapies to treat patients across a range of solid tumors.
Our Methodology
To compile our list of the best penny stocks to invest in according to the media, we gathered over 50 penny stocks from financial media websites on the internet. We then selected the top 12 penny stocks that were the most widely held by hedge funds, as of Q3 2024.
Why do we care about what hedge funds do?
The reason is simple: hedge funds have a proven track record of delivering higher returns over the long term. By investing in the same stocks that are favored by hedge funds, investors can potentially benefit from this expertise and achieve better returns on their investments.
Exploring Elevation Oncology’s Pipeline
Elevation Oncology’s main products have cleared initial FDA approvals and are showing promising results in their initial research phases. The company is advancing its pipeline with the nomination of poziotinib for FDA approval. If poziotinib advances to the FDA’s final approval, it could become a unique treatment for a specific type of bladder cancer, presenting a massive growth opportunity for the company.
ELEV Ranks 11th on Our List of Best Penny Stocks To Invest In According to Media
While we acknowledge the potential of ELEV to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ELEV but that trades at less than 5 times its earnings, check out our report on the cheapest AI stock.
Disclosure
None. This article is originally published at Insider Monkey.
