4 Small Cap Stocks That Brokers Love Right Now
Zacks Investment Research | Sep 12, 2016 09:04PM ET
The U.S. labor market has shown a decent recovery in the past few months and the inflation level is no longer a concern, but there is still a widespread debate regarding the overall health of the U.S. economy. As a result, the hike in interest rates is not expected to be a smooth affair.
Deteriorating infrastructure, rising income inequality, elevated pension and medical costs, large current account and government budget deficits are causes of concern. Further, any improvement on the global growth front is yet to be seen. Nonetheless, household spending is likely to continue boosting the U.S. economy on the back of a buoyant consumer confidence, solid employment and faster wage growth.
Weak investment levels continue to hamper growth, which is in turn is leading to lower productivity. Thus, the combination of rising wage levels and low productivity will likely pose a threat to profitability of corporates in the coming quarters. In fact, based on these concerns, the International Monetary Fund lowered its outlook for the U.S. economic growth rate by 0.2% to 2.2%, in its latest global outlook.
In such a scenario, it becomes difficult for investors to pick right stocks. A basic analysis solely based on a stock’s fundaments may not be sufficient to take an investment decision on it. Hence, one can rely on broker recommendations. Brokers have a deeper understanding of the impact of economic developments on the stocks and the sectors, so their advice should lead to better returns. Also, an average of all broker recommendations provides the most likely picture of the stock’s future.
4 Broker-Favorite Small Cap Stocks to Buy Now
We have shortlisted four broker-favorite small cap stocks from four different sectors with the help of Zacks Investment Research
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