A great investment opportunity doesn't have to come from a cutting-edge or undiscovered company - some of the best investments right now are global brand names right on the cusp of profitable breakouts.
Today, we're looking at two well-known small-cap stocks with breakout potential that Wall Street is overlooking.
You see, small-cap stocks - those with market caps between $300 million and $2 billion - have a serious advantage over larger companies.
Small-cap stocks have significant growth potential that outpaces companies with larger capitalization.
In fact, according to investment consulting firm Ibbotson Associates, small-cap stocks have averaged better returns than large caps going back to 1927. That trend isn't going to change anytime soon, either.
One reason for that is Wall Street and the media tend to overlook small-cap stocks in favor of the larger companies with higher trading volumes. That means you can own excellent, profitable companies without paying a premium for the hype around them.
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And that can result in explosive profits for the investor who gets in on the ground floor on the right stock.
Our top two small-cap stocks are strong examples of the small-cap advantage - all two are popular, mainstream companies that have plenty of room to grow, making them the perfect buys for the savvy investor.
Plus, these small-cap stocks have a Money Morning Stock VQScore™ of 4, indicating that they have strong underlying value and a high chance of providing significant gains for investors.
And the first stock is a ubiquitous global brand currently selling at a bargain price...
Small-Cap Stock to Buy Right Now, No. 2: Hostess Brands Inc.
Hostess Brands Inc. (Nasdaq: TWNK) doesn't need an introduction.
Hostess owns the Hostess and Dolly Madison brands, and the company is known for its production of some the world's most popular packaged baked goods, including Twinkies, Drake's Cakes, and Suzy Q.
Since Hostess declared bankruptcy in 2011, the company has staged a significant turnaround, refocusing its advertising strategy, streamlining production, and going public to raise revenue in November 2016.
Over the last two years, the company's revenue has grown by an average of 12.2%.
However, Hostess still has room to run, and that means you're getting in early as the household favorite completes its turnaround.
Analysts have put a high price target of $20 on the company's stock - a 33% gain over the current price of $14.43.
And Hostess only trades for eight times its earnings - making it the most affordable stock in the consumer staples industry.
While a 33% gain is exciting, our top small-cap stock is set for even greater profitability - a gain of over 50%.
Here's our favorite small-cap stock to buy right now...
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Small Cap Stock to Buy Right Now, No. 1: Big Lots! Inc.
Big Lots! Inc. (NYSE: BIG) is a national retail company based in Columbus, Ohio. The company is known for selling closed-out and overstocked merchandise at bargain prices.
In 2017, Big Lots saw its net sales increase to $70.5 billion, while the company's operating expenses decreased by 7 million, indicating that the company's profitability is increasing even as it trims down the cost of its operations.
Big Lots' recent performance has been red hot - the company has beaten revenue estimates for the last 17 quarters and seen increased sales over the last year.
That sort of revenue growth helps the company pay a 2.5% dividend - its largest yield ever.
Owning BIG gives you the added income of a robust dividend with all the growth prospects of one of the best small-caps on the market.
And the company has no intention of slowing down. Big Lots is slated to open 180 new stores across the country this year alone.
The retail chain currently trades for $42. However, with such great growth potential, analysts see the stock heading to a high of $65.00 - a gain of 54%.
But you don't have to stick with small-cap stocks to find explosive profits in the stock market. In fact, we can show you how...
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