Small-cap stocks have had a shaky start in 2024, but UBS thinks the sector is worth looking at as a potential broader market rally could boost the sector.
Year to date, the Russell 2000 index of small companies is up 2% while the S & P 500 has gained 6.6%.
"We view the expectations around interest rates coming down as incrementally a more supportive backdrop for SMID stocks," UBS analyst Joseph Parkhill wrote in a note last week, referring to small- to mid-cap stocks.
With these factors in mind, UBS analysts compiled their list of high conviction, small- and mid-cap names which the bank believes have a unique investment thesis behind them.
U.S.-traded shares of Zurich-based On have surged more than 22% in 2023, bringing the past 12 months' rally to 45%.
Persons:
Russell, Joseph Parkhill, Roger Federer, Jay Sole, Brody Preston, Preston, WAL, Joshua Chan, There's, — CNBC's Michael Bloom
Organizations:
UBS, Federal, LSEG, Western Alliance Bancorp
Locations:
., Zurich, Phoenix, Aramark, Wall