This Group of Stocks Is About to Break Out

It's time to look away from the heavyweights for alpha... The past few weeks have been choppy for large-cap stocks. Investors have been set up for disappointment this earnings season, leading to short-term volatility. The large-cap S&P 500 Index and the tech-heavy Nasdaq are up 5% and 8%, respectively, since late August. Still, it hasn't […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily Weekend] This Group of Stocks Is About to Break Out By Joel Litman It's time to look away from the heavyweights for alpha... The past few weeks have been choppy for large-cap stocks. Investors have been set up for disappointment this earnings season, leading to short-term volatility. The large-cap S&P 500 Index and the tech-heavy Nasdaq are up 6% and 10%, respectively, since late August. Still, it hasn't been a smooth ride up... And investors are beginning to clue into what we have been saying: the slowing of earnings growth for the near future, fears over inflation, and concerns with Washington's threatening deadlock. While this doesn't mean a crash is imminent, it does mean for the moment that large-cap names like Apple (AAPL) and Facebook (FB) may not be the best place to park your money. Instead, another group of stocks has weathered this recent volatility even better than most: The Russell 2000 – the index of small and microcap names – is up 13% over the same period. Part of the reason for this is that the Russell 2000 has been relatively stagnant since March, while the other indexes have continued to rally. The S&P 500 was up more than 15% from March through August. The Nasdaq was up more than 13% in the same period, while the Russell was flat. --------------------------------------------------------------- Recommended Links: [Last week was HUGE]( Last week, Professor Joel Litman revealed the name of a stock he believes could soar by up to 1,000%. Normally, you'd have had to pay thousands of dollars to see his presentation. But right now, you have a limited time to check it out for free. [Click here for the full details](. --------------------------------------------------------------- [These EV stocks are soaring higher than Tesla]( Few people are paying attention to the little-known EV stocks soaring up to 30%, 100%, and almost 200% higher than Tesla... [Here's the list](. --------------------------------------------------------------- As the pendulum swings back, the return of the microcap is coming... The reason for this slowdown was a shift in investor focus. With folks again concerned about the global pandemic and the emergence of the delta variant, the world of "At-Home Revolution" names once again saw a huge boon. These names, bringing essential services into the home, are predominantly the large tech companies. These companies also sit on top of the Nasdaq and the S&P 500, driving these indexes and inflating valuations. Meanwhile, small-cap and microcap names didn't benefit in the same way from at-home tailwinds. These smaller companies have been off people's radars. With the second wave of the pandemic, folks were more focused on Amazon (AMZN), Alphabet (GOOGL), and Zoom Video Communications (ZM) – names that clearly benefited. As the world starts to reopen again and these larger names come under pressure to deliver stellar results, the Russell 2000 can get the market's attention once again as investors recognize the value of these "off the beaten track" names. For context, these are the companies that took off between October 2020 and March 2021. As investors realized these smaller names weren't, in fact, about to go under and had great tailwinds from cheap lending and raised economic spending, they were trading at bargain prices. From October 2020 to March 2021, the S&P 500 and the Nasdaq were up less than 20% each. However, the Russell 2000 was up almost 50% during the same period... As some technical analysts at Real Money and other outlets have highlighted, the Russell 2000 shows that the market is beginning to recognize the potential for another small-cap and microcap run. And it's not based just on hype, but on fundamentals. This means people who can get in front of this next rally in the Russell 2000, just like the one a year ago that lasted until March, are uniquely positioned to benefit in an otherwise tumultuous time for stocks. And the best part for active investors is that when the Russell 2000 runs, the cream of the crop in that index runs even higher than the average. We can look to our Microcap Confidential for a few stellar examples of tiny companies with big gains... Four of the microcaps that we recommended to our readers during these six months soared 100%, 185%, 126%, and 121%. That's as the market discovered the value of these smaller names when the larger players were getting overheated. Right now, with the Russell 2000 set up for a similar run, a lot of these same microcaps we're identifying are set to take off like rocket ships again. In fact, I shared the name and ticker symbol of one of my favorite microcaps in a recent speech at our sister company Stansberry Research's annual conference in Las Vegas in late October. For the next few days, you can watch that presentation – which some folks had to pay thousands of dollars to view – and learn how to gain access to Microcap Confidential at a fraction of the regular price, by [clicking here](. Regards, Joel Litman If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2021 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](