Fury over small capitalization stocks: Argentine company appears in a global top ten

World markets, and in particular, Wall Street, Europe and Japanare experiencing a rally lasting several months to which no one yet risks setting an expiration date, no matter how much Everyone fears some adjustment or the bursting of some “bubble”. In the middle, the whole maelstrom of fury over the so-called “Magnificent Seven” breaking records, taking stock market indices to uncharted territory.

But in the last thirty days reports and analyzes began to increase recommending starting to look at other options in addition to the traditional ones and in that sense from the emerging markets to some junk bonds They entered the radar of fund managers. However, when it came to betting, increasingly, strategists began advising bets over calls “small caps”, which are low market capitalization companies.

Although large-cap stocks maintain their advantage over small-cap stocks so far this year, many investors are wondering what’s new since large companies have been performing much better on the stock markets than small ones for years. That is why analysts consider that This worse previous performance may be an opportunity because they maintain that small-cap securities are trading at much more attractive prices than those of larger companies.

Now, if this is the trend, then what to bet on. They were the analysts of Morningstar those who came out to give some clues, pointing out that it was time to bet on the small caps because the potential of these titles is impressive, even though they are volatile. The analysts of the prestigious financial services firm based in Chicago focused on ten smaller capitalization companies that highlight their lasting competitive advantages, the excellence of their management teams and the notable upside potential compared to their target prices. Among them are in the top ten, one from Argentina, and two others with operations in the country. What was the selection they made?

Fury over small capitalization stocks: what is the Argentine company that appears in a global top ten?

First of all, Lithium Americas (Lithium Argentina), a producer of pure lithium to which they assign a theoretical value of $25, well above its current price of just over $5.6. The forecast of an increase in lithium prices for this year is the main catalyst that the group currently has, these strategists say. It is worth remembering that Lithium Americas is a Canadian group that operates mining projects and developments, in particular, linked to lithium, in Salta and Jujuy and that in 2023 separated Lithium Argentina in two listed companies, Lithium Americas (LAC) and Lithium Argentina (LAAC). In recent times it has barely risen a dollar.

The second company From this list of small cap securities to buy in the long term is HanesBrands, is an American multinational company that is a leader in the basic underwear market. Although consumer demand remained weak last quarter, the company showed progress in its margins, Morningstar explains. As for the target price, they establish it in the 18.8 dollars, level much higher than the current price of its shares, which barely exceeds 5.4 dollars. In these weeks he advanced little more than a dollar.

In third place, another clothing manufacturer appears, V.F.owner of such popular brands as Vans, The North Face and Timberland, which is implementing a restructuring plan to cut costs and reduce debt, analysts highlight that they are confident that its growth will be faster than most of its competitors. For the people at Morningstar the target price is $57 vs. $16 that is currently listed. Recently she went up a dollar.

The key issue of lithium added another company linked to the mineral to the betting listis about Arcadium Lithium, arising from the merger between two of the major players in the global lithium market, the Australian Allkem and the American Livent. The new company is a world leader in the production of lithium chemicals and in Argentina they have lithium projects in the Puna. For analysts, it is a value clearly undervalued by the market, which makes it a good investment opportunity. Regarding the target price, they place it at $14 compared to the $5 at which it is negotiated.

Fifth place on the list is occupied by Nordstrom, a chain of luxury shopping stores in the US, which was initially a footwear retailer and today also sells clothing, accessories, bags, jewelry, cosmetics, fragrances, and, in some places, home furnishings. For Morningstar, it is a leader in the US clothing market, with a loyal customer base and whose management is on the right track. Regarding the target price, they set it at $40 compared to just over $20 currently.

Adient, a leader in the automotive seating market, was ranked sixth in Morningstar’s selection, due to reduced competition and favorable revenue and profit prospects for the future, they explain. It has a plant in Santa Fe. As for the theoretical value, they mark it at 71 dollars, well above the current around 35.

In it seventh place technology appears Sabre, one of the few on the Nasdaq list, which they praise for its liquidity profile and its prominent position in global distribution systems, driven by a leading network of airline content and travel agency clients. Regarding the target price of this provider of technological solutions for airlines and agents, they set it at $8.60 and today they are trading just above $2.

Then figure Lyft, an American transportation company that connects drivers and car-sharing users through a mobile application. Morningstar expects the company to be profitable in 2025, placing its target price at $25 above the $17 at which it is currently trading.

In ninth place is the producer of salt and special potassium fertilizers Compass Minerals Due to their enviable portfolio of assets with cost advantages, they argue and set their target price at $45 up from almost $22 currently.

He Last name from the list is American chemistry FMC, to whose titles they give a high upward potential with respect to their target price of 110 dollars – today they are trading around 64 dollars. It is an agricultural sciences company offering crop protection, plant health, and professional turf and pest control products. The portfolio of new quality products from this crop chemical manufacturer should propel the group on the stock market, Morningstar analysts highlight.