The beginning of earnings season is a good time to look at stocks that analysts are upgrading. For growth-oriented investors, that may mean looking at some of the top-rated Russell 2000 stocks.
The Russell 2000 index is made up of the 2000 smallest companies in the Russell 3000 index. Not surprisingly, these stocks can be more volatile than large-cap blue-chip stocks. These small- and mid-cap stocks were hit particularly hard in 2023 but rallied hard to end the year.
That encouraging rally has fizzled in the first two weeks of 2024. The index is down 4.9% since January 1 as investors have failed to expand the breadth of the market rally. But analyst sentiment is a good way for growth investors to find those outliers.
Analyst ratings aren’t perfect, but they give investors a sense of if the “smart money” will be buying or selling a stock. Here are three top-rated Russell 2000 stocks to consider adding to your portfolio in 2024.
One of the most surprising fashion trends that emerged from the pandemic was the re-emergence of Crocs (NASDAQ:CROX). The footwear company known for its signature sandals continues to expand its product line to include slippers, slides, and boots.
The company also continues to post year-over-year increases in revenue and earnings. However, that growth is slower, in part, due to the company’s misjudging the market’s appetite for the Heydude brand that it purchased in 2022.
Despite those gains, CROX stock is down over 30% from where it was in April 2023. However, this gives investors several reasons to look at the stock as a buying opportunity. First off, CROX has had five analyst upgrades in the last 90 days making it one of the top-rated Russell 2000 stocks.
Second, the company is forecasting about 8.5% growth in earnings, but trades at approximately 8x forward earnings. Analysts give CROX stock a 38% upside from its current level.
The Heydude acquisition was a misstep, but it’s not likely to be a fatal one. And as the company navigates that, look for further upside in CROX stock.
Immunovant (NASDAQ:IMVT) is a clinical-stage biopharmaceutical company that is developing monoclonal antibodies for treating autoimmune diseases. Specifically, the company is a leader in developing anti-neonatal Fc receptor (anti-FcRn) technology to treat the more than 2 million people who are estimated to be living with conditions mediated by immunoglobin G (IgG) autoantibodies.
Immunovant started trading publicly in July 2019 as part of a special purpose acquisition company (SPAC). Like many SPAC stocks, IMVT stock soared to over $50 a share as part of the meme stock movement. That was hype, and the stock fell all the way down to penny stock range in 2022.
It’s recent rise is fueled by hope. The company’s lead candidate, batoclimad, is designed to target four distinct therapeutic areas and is in Stage 2 or Stage 3 clinical trials for each indication. In December, the company reported positive results for batoclimad’s Stage 2 trial in patients with Graves diseases.
IMVT stock rose nearly 20% on that news, but that’s only a continuation of the stock’s bullish trend higher. For example, it’s up over 79% in the last six months. And IMVT stock is one of the most upgraded stocks by analysts having received six upgrades in the last 90 days.
There’s still some time to wait before profitability. It will likely be 2026 before Immunovant has a drug that’s commercially available. But with analysts bidding the stock higher an entry point of around $40 per share is compelling.
Uranium Energy Corp. (UEC)
Uranium Energy Corp. (NYSEAMERICA:UEC) makes this list of top-rated Russell 2000 stocks because of bullish price target forecasts. Of the five analysts that have issued ratings in the last 90 days, all five give the stock a Strong Buy rating. And at least four analysts have raised their price target for UEC stock.
That turned out to be wise advice as the price of uranium surged towards 15-year highs in mid-January. And the price of uranium is expected to increase due to supply and demand dynamics.
In an interview with Morningstar, Michael Alkin, principal of uranium- and nuclear-focused investment manager Sachem Cove Partners said that utilities are “ramping up purchases at a time when the uranium mining industry is not yet in a position to respond to the new wave of utility demand coming to the market.”
Demand for uranium is also likely to increase as more climate change advocates understand that it truly is one of the only sources of clean energy available.
All five analysts that have offered a rating on UEC stock in the last 90 days give it a Strong Buy with a consensus price target of $10, a 25% increase from the stock’s price as of this writing.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.