#7 - Shoe Carnival (NASDAQ:SCVL)
The last of our small-cap stocks is another solid option for value investors. However, the recent move in Shoe Carnival (NASDAQ:SCVL) is being driven more by high short interest creating a short squeeze. But short squeezes, like sugar highs, are not sustainable ways to boost the “energy” in a stock.
For that, you can look at the company’s recent earnings report. The company blew away earnings estimates and also beat on revenue. Currently SCVL stock is trading at the low end of its 52-week range. Right now analysts have a consensus price target that gives Shoe Carnival a 44% upside. But there may be more upgrades to come.
Shoe Carnival also pays a dividend. And despite the pandemic, the retailer has managed to increase its dividend in each of the last eight years. That’s no small accomplishment considering that many retailers cut or suspended their dividends in that same period. The company also has plans to repurchase shares. This attention to providing shareholder value combined with strong earnings makes SCVL stock an undervalued play.
About Shoe Carnival
Shoe Carnival, Inc, together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app.
Read More - Current Price
- $33.90
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 1 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $42.00 (23.9% Upside)
Because of their volatility, small-cap stocks can be a favorite of day traders and swing traders who are only concerned with short-term price movement. However, most small-cap investors are best served by using a buy-and-hold strategy with small-cap stocks.
That's because in some cases, these companies have a business model that takes time to catch on at scale. And it should be said that a higher percentage of these companies will go bankrupt, or never become more than a penny stock. That's why it's imperative for you to perform your due diligence before investing in small-cap stocks.
If you're looking for a way to invest in small-cap stocks without picking individual stocks, you can invest in the Russell 2000 index. Like some individual small-cap stocks, the Russell 2000 is underperforming the S&P 500. Still, investing in this index allows you to smooth some of the volatility that comes from picking individual stocks.
More Investing Slideshows:
