15 stocks to buy now as small caps soar in 2023: BMO

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BMO: These 15 top stocks will continue to outperform the market as an explosive rally for small caps gains momentum

Smaller stocks don't steal headlines like their large-cap peers, but they've actually had a better year so far. In January, the small-cap-focused Russell 2000 index beat the Russell 1000 by 3.1 percentage points, which was the largest spread in 12 months, according to Bank of America.

But the Russell 2000's gains last month look modest compared to those of the top 15 small-cap names that strategists at BMO Capital Markets put together. These picks from the Montreal-based firm rose 13% in January while the small-cap index climbed 8.1% when translated to Canadian dollars. Small caps have a history of seeing huge rallies. Last year, the Russell 2000 rose 22.5% from June 16 to August 16, only to give up nearly all of those gains by late September.

And if the Russell 2000 keeps its recent rally going, BMO's small-cap picks will outperform this year as well. Below are the 15 small-cap stocks that BMO Capital Markets recommends most right now, along with the ticker, market capitalization, and price-to-earnings ratio for each. All except one of these stocks rose last month, wrote Brian Belski, the firm's chief investment strategist, in a February 1 note.

 

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