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What Are the Top Small-Cap Stocks to Watch in 2021?

Summary:Discover top small-cap stocks to watch in 2021, including healthcare, technology, consumer goods, and energy companies. Learn how to invest in penny stocks and diversify your portfolio for long-term gains.

Small-cap stocks are those companies with a market capitalization ranging from $300 million to $2 billion. They are often considered to be riskier than their larger counterparts, but with that risk comes the potential for higher returns. As we head into 2021, there are several small-cap stocks to watch that have the potential to outperform the market.

Healthcare

One sector that is poised for growth in 2021 is healthcare. With the ongoing pandemic, companies in this sector are in the spotlight. One small-cap stock to watch is iBio, Inc. (IBIO), a biotech company that focuses on developing vaccines and therapeutics for infectious diseases. IBIO's stock price surged in 2020 due to its involvement in the development of a COVID-19 vaccine. As the pandemic continues, IBIO could see further gains.

Technology

Another sector that is expected to see growth in 2021 is technology. One small-cap stock to watch is AppFolio, Inc. (APPF), a software company that provides cloud-based solutions for property management and legal industries. With the real estate market rebounding and the need for remote work solutions increasing, AppFolio's services could see a surge in demand.

Consumer Goods

The consumer goods sector is always a reliable choice for investors looking for stability. One small-cap stock to watch is Freshpet, Inc. (FRPT), a company that makes fresh, refrigerated pet food. With more people staying at home during the pandemic, pet ownership has increased, and Freshpet's products have become more popular. As the pet industry continues to grow, Freshpet's stock price could see a boost.

Energy

Finally, the energy sector is worth keeping an eye on in 2021. One small-cap stock to watch is Northern Oil and Gas, Inc. (NOG), an oil and gas exploration company. With the incoming Biden administration's focus on renewable energy, traditional energy companies like Northern Oil and Gas could see a dip in stock prices. However, as the economy recovers, demand for oil and gas could rebound, making Northern Oil and Gas a solid investment option.

Investment Tips

When investing in small-cap stocks, it's important to do your research anddiversify your portfolio. Small-cap stocks can be volatile, so it's crucial to have a long-term investment strategy. Additionally, it's important to keep an eye onmarket trendsand news that could impact the companies you invest in.

In conclusion, there are several small-cap stocks to watch in 2021 that have the potential to outperform the market. Healthcare, technology, consumer goods, and energy are all sectors worth considering. However, it's important to keep in mind the risks associated with small-cap stocks and to have a solid investment strategy in place.

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