What is a small-cap stock?
A small-cap stock is a company whose valuation is typically less than $1 Billion. Some, however, define a small-cap stock as one valued between $500 Million-$2 Billion. For the sake of this article, we will be using the first definition.
Why do so many people enjoy investing in small-cap stocks? They have a higher probability of a large return; however, this also comes with greater uncertainty and a greater deal of risk. Small-cap stocks also have the potential to be bought out by larger companies due to their valuations being lower.
The biggest upside is that due to the lower price of these companies, there is a greater chance for higher percentage growth in the long term. We will be exploring several exciting companies that have the potential to be successful in the future.
AxoGen, Inc. (AXGN)
AxoGen, Inc. is an American medical device manufacturer founded in 2002. Their focus is on the development of surgical solutions, especially human tissue grafts. These are used to remedy peripheral nerve damage. Damage to a peripheral nerve can lead to the loss of muscle or organ functionThe technologies they develop aim to provide patients with the same quality of life those of us with healthy peripheral nerves have.
AxoGen has a current market-cap of $256 million, falling well within our bounds for small-cap stocks. The current trading price of $5.87 per share offers an interesting opportunity, especially since they have begun to rebound over the past six months. This is an interesting stock to keep an eye on in the future!
AngioDynamics, Inc. (ANGO)
AngioDynamics, Inc. is an American manufacturer of medical devices founded in 1988. They are focused on the creation of technologies in vascular, peripheral vascular, and oncology medicine. These devices provide healthcare professionals the tools they need to help afford patients with higher quality care, and a higher quality of life.
The current market cap for AngioDynamics is $236 million. This is another stock that has had a more challenging time in recent months, having a decline in stock price. But, since their January 5th report caused a large dip in the price, I think there is opportunity there if they are able to get their year back on track. Since late March, there has been more positive momentum building, and I think there is an opportunity there for it to rebound more in the future.
OraSure Technologies, Inc. (OSUR)
OraSure Technologies, Inc. is an American medical device manufacturer. They specialize in the development of diagnostic testing kits, most notably their OraQuick kit. OraQuick was the first over-the-counter home HIV test. They have also recently inked a distribution deal for a Syphilis rapid test.
OraSure has a current market cap of $406 million. Recent developments, such as the rapid Syphilis testing kit, has started some positive momentum, though the stock price has still struggled over the past year. Though the stock price has struggled to match the 52-week high of $8.45, it has the potential to rebound as it has at times over the past 6 months, and could be a buy-low stock pick to keep an eye on.
Orthofix Medical Inc. (OFIX)
Orthofix Medical Inc. is a medical device company that is headquartered in Lewisville, Texas. They operate in the spine and orthopedics segment. More specifically, they develop spine hardware and bone growth therapies. The products they have developed are distributed in over 60 countries.
The current market cap for Orthofix is $562.94 million. This is safely within the bounds of a small-cap stock. Despite struggles in the past year, Orthofix is beginning to rebound. In September 2023, after leadership changes, they suffered a single day decrease of 30% to their stock price. Since the beginning of 2024 the stock has begun to recover, now up 14% year to date. This is a good indication to me that they have moved past the worst of the negative impact the changes to leadership will cause. The current traded price of $15 represents an intriguing opportunity to buy the stock near the lowest it has been in 5 years.
BioLife Solutions Inc. (BLFS)
Okay, I am cheating with this one, as the current market cap for BioLife Solutions is $1.01 billion. This is just over the criteria we started the article with, but the opportunity here is something I felt needed mentioning. BioLife Solutions is a manufacturer of tools and services for the cell and gene therapy markets based out of Boswell, WA. Their products are more specifically tools for cell collection and processing.
As previously mentioned, the current market cap of BioLife Solutions is currently $1.01 billion. This is slightly above our working definition for a small-cap stock, but based on some other definitions, and how close it is to our cutoff, it needed to be mentioned. This is due to the recent strong performance of their stock. All of the other stocks mentioned so far have declined year to date, but so far BioLife is up about 37% year to date. This recent strong performance deserves attention, and is a stock I am keeping my eyes on.
Thoughts on Small-Cap Medical Device Manufacturers
There is not a great deal of information to help identify companies in the medical device sector, especially not those that have a market cap under $1 billion. I feel this is a shame, because you can find stock recommendations for small cap companies in nearly any industry. Medical device manufacturers can always be on the edge of dramatic increases in their market cap and stock price.
As recently as 2020-2022 with the Covid-19 pandemic, there was large growth across the industry. Companies that were well established such as Johnson & Johnson and Thermo Fisher experienced periods of growth to their stock prices. But this growth was not exclusive to established players in the industry. Lesser known (to the mainstream) companies such as Medline Industries experienced revenue growth of nearly 26% in 2020, due in part to increased spending during the pandemic.
This is not me saying to wait for another large-scale pandemic to buy into the medical device sector. I do, however, think that this should help remind us that we do not know what the future holds, and any company can be the one that grows with the next shifting of the industry. This is the allure of small-cap stocks. Any one has the potential to grow into the next powerhouse.
What is a small-cap stock?
A small-cap stock is a company whose valuation is typically less than $1 Billion. Some, however, define a small-cap stock as one valued between $500 Million-$2 Billion. For the sake of this article, we will be using the first definition.
Why do so many people enjoy investing in small-cap stocks? They have a higher probability of a large return; however, this also comes with greater uncertainty and a greater deal of risk. Small-cap stocks also have the potential to be bought out by larger companies due to their valuations being lower.
The biggest upside is that due to the lower price of these companies, there is a greater chance for higher percentage growth in the long term. We will be exploring several exciting companies that have the potential to be successful in the future.
AxoGen, Inc. (AXGN)
AxoGen, Inc. is an American medical device manufacturer founded in 2002. Their focus is on the development of surgical solutions, especially human tissue grafts. These are used to remedy peripheral nerve damage. Damage to a peripheral nerve can lead to the loss of muscle or organ functionThe technologies they develop aim to provide patients with the same quality of life those of us with healthy peripheral nerves have.
AxoGen has a current market-cap of $256 million, falling well within our bounds for small-cap stocks. The current trading price of $5.87 per share offers an interesting opportunity, especially since they have begun to rebound over the past six months. This is an interesting stock to keep an eye on in the future!
AngioDynamics, Inc. (ANGO)
AngioDynamics, Inc. is an American manufacturer of medical devices founded in 1988. They are focused on the creation of technologies in vascular, peripheral vascular, and oncology medicine. These devices provide healthcare professionals the tools they need to help afford patients with higher quality care, and a higher quality of life.
The current market cap for AngioDynamics is $236 million. This is another stock that has had a more challenging time in recent months, having a decline in stock price. But, since their January 5th report caused a large dip in the price, I think there is opportunity there if they are able to get their year back on track. Since late March, there has been more positive momentum building, and I think there is an opportunity there for it to rebound more in the future.
OraSure Technologies, Inc. (OSUR)
OraSure Technologies, Inc. is an American medical device manufacturer. They specialize in the development of diagnostic testing kits, most notably their OraQuick kit. OraQuick was the first over-the-counter home HIV test. They have also recently inked a distribution deal for a Syphilis rapid test.
OraSure has a current market cap of $406 million. Recent developments, such as the rapid Syphilis testing kit, has started some positive momentum, though the stock price has still struggled over the past year. Though the stock price has struggled to match the 52-week high of $8.45, it has the potential to rebound as it has at times over the past 6 months, and could be a buy-low stock pick to keep an eye on.
Orthofix Medical Inc. (OFIX)
Orthofix Medical Inc. is a medical device company that is headquartered in Lewisville, Texas. They operate in the spine and orthopedics segment. More specifically, they develop spine hardware and bone growth therapies. The products they have developed are distributed in over 60 countries.
The current market cap for Orthofix is $562.94 million. This is safely within the bounds of a small-cap stock. Despite struggles in the past year, Orthofix is beginning to rebound. In September 2023, after leadership changes, they suffered a single day decrease of 30% to their stock price. Since the beginning of 2024 the stock has begun to recover, now up 14% year to date. This is a good indication to me that they have moved past the worst of the negative impact the changes to leadership will cause. The current traded price of $15 represents an intriguing opportunity to buy the stock near the lowest it has been in 5 years.
BioLife Solutions Inc. (BLFS)
Okay, I am cheating with this one, as the current market cap for BioLife Solutions is $1.01 billion. This is just over the criteria we started the article with, but the opportunity here is something I felt needed mentioning. BioLife Solutions is a manufacturer of tools and services for the cell and gene therapy markets based out of Boswell, WA. Their products are more specifically tools for cell collection and processing. As previously mentioned, the current market cap of BioLife Solutions is currently $1.01 billion. This is slightly above our working definition for a small-cap stock, but based on some other definitions, and how close it is to our cutoff, it needed to be mentioned. This is due to the recent strong performance of their stock. All of the other stocks mentioned so far have declined year to date, but so far BioLife is up about 37% year to date. This recent strong performance deserves attention, and is a stock I am keeping my eyes on.
Thoughts on Small-Cap Medical Device Manufacturers
There is not a great deal of information to help identify companies in the medical device sector, especially not those that have a market cap under $1 billion. I feel this is a shame, because you can find stock recommendations for small cap companies in nearly any industry. Medical device manufacturers can always be on the edge of dramatic increases in their market cap and stock price. As recently as 2020-2022 with the Covid-19 pandemic, there was large growth across the industry. Companies that were well established such as Johnson & Johnson and Thermo Fisher experienced periods of growth to their stock prices. But this growth was not exclusive to established players in the industry. Lesser known (to the mainstream) companies such as Medline Industries experienced revenue growth of nearly 26% in 2020, due in part to increased spending during the pandemic. This is not me saying to wait for another large-scale pandemic to buy into the medical device sector. I do, however, think that this should help remind us that we do not know what the future holds, and any company can be the one that grows with the next shifting of the industry. This is the allure of small-cap stocks. Any one has the potential to grow into the next powerhouse.