Small Cap stocks are primed to do well over the next decade as investors continue to search for yield in the present and in the future. Today, we are going to highlight one small cap stock recommendation that will perk up some gamers and audiophiles: Turtle Beach Corporation, known by its stock ticker $HEAR.
CryptoTraderNews mentioned how small cap stocks relative to large cap stocks are comparatively undervalued and still are at the time of this writing. It seems as if investors have two options:
- Stick with large cap stocks that seem to be bloated and overvalued.
- Hunt for value and growth elsewhere.
Lack of Confidence in the Overvalued Large Caps
CryptoTraderNews also mentioned that earnings growth in countries such as India, China, and even the United States don’t look promising. The earnings growth rate in India has halved, corporate earnings in the United States aren’t promising, and China has shown varying signs of distress since 2016. Yet still large cap stocks in countries such as the United States see continued growth spurred on by quantitative easing, tax cuts, stock buybacks, and other stimulative efforts.
Where’s The Innovation in Large Cap Stocks?
Look around, which large cap companies are really innovating? They are either caught up in streaming wars, buying back their stocks, or finding ways to simply cut costs to show increased earnings. Even technology companies such as Apple have yet to show signs of any compelling innovative actions at present.
Simply put, innovation in large cap stocks, in my view, is nowhere to be seen. Startups and small companies continue to meet that need in the market. These smaller companies have the ability to focus in on specific problems, to meet a need, and to make a difference.
Let’s focus on one of the more interesting and volatile small cap stocks.
$HEAR Turtle Beach Corporation
The Turtle Beach Corporation was founded in 1975 and its stock has been on a bit of wild ride in these financial markets. The company states that it is a “global gaming accessory manufacturer” in California. The corporation focuses on creating gaming headsets for different gaming devices such as the Xbox One to the Nintendo Switch.
The HEAR stock had all time highs around $84.03 in 2013 before sinking all the way to $1.88 in 2018. Return on Assets on this stock is over 50% and Return on Equity is over 60%.
Turtle Beach Corporation and its stock would bounce back to $26.00 before plummeting again to its current share price of $8.19.
Revenue is down, net income is down, and so is net profit margin but that doesn’t necessarily count this stock out just yet.
The Turtle Beach Corporation is still churning out compelling products and is near its yearly lows.
After all, gaming and e-sports is on the rise and is just getting started and its current market capitalization of $118.9M screams potential value. Another promising sign is insider buying in the Turtle Beach Corporation.
This small cap stock suggestion is for those who have the ability to stomach volatility and hold it for the short term. Turtle Beach Corporation may not be for everyone, especially long-term holders looking for increased dividends or steady stream of revenue and earnings. At this point in time, it might best be used as a day trading vehicle to pad your portfolio with quick action.
Stay tuned for more small cap stock recommendations over these next few weeks.
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