A Year of Expansion and Growth Ahead
In a recent interview with CNBC, Global Advisors’ managing partner, Tom Lee, shared his thoughts on the potential of small and mid-cap stocks in 2025. According to Lee, the upcoming year is expected to be a good one for these types of companies, thanks to interest rate cuts and the incoming administration.
A Discounted Market
Lee pointed out that small-cap stocks are currently trading at a discount with a medium P/E multiple of 10. This suggests that investors may be underestimating the growth potential of these companies.
An Opportunity for Outperformance
New Street Advisors CEO Delano Saporu has similar thoughts and believes that small-cap stocks are well-positioned to outperform in 2025. The economy has shown resilience in 2024, especially the recovery in the last quarter has signaled a promising outlook for businesses.
Why Small-Cap Stocks Are Resilient
Small-cap stocks are conventionally focused on the domestic market, with less exposure to international trade compared to large-cap counterparts. Therefore, Trump’s tariff policies will not have a major impact on small-cap stocks compared to large-cap stocks.
A Strong Market Outlook for 2025
The US stock market is expected to deliver another year of impressive gains in 2025. The S&P 500 index surged more than 25% in 2024, while the tech-heavy Nasdaq 100 jumped up to 28%.
Index Performance
- The Russell 2000 index, which covers small-cap companies, soared more than 15% over the last year.
- The Dow Jones U.S. Small-Cap Index has risen by 18%.
A Positive Economic Outlook for 2025
According to Torsten Slok, economist at Apollo Global Management (APO), the US economy will deliver strong results with no signs of major slowing in 2025.
Interest Rates and GDP Growth
- Interest rates are expected to stay ‘higher for longer’ despite the Fed’s current interest rate-cutting cycle.
- The US economy is expected to register GDP growth of 2.2% in 2025, signaling a modest growth driven by less restrictive monetary policy, resilient consumer spending, and a steadying labor market.
Gossamer Bio, Inc. (NASDAQ:GOSS) – A Promising Penny Stock
Gossamer Bio, Inc. (NASDAQ:GOSS) is among the top penny stocks to invest in according to media outlets. The company’s financials are solid, with cash and cash equivalents of $327 million as of Q3 2024.
Product Candidate and Clinical Trials
- Gossamer Bio’s product candidate, Seralutinib (GB002), is an investigational treatment for pulmonary arterial hypertension.
- GB002 is currently under phase three clinical trials and the company expects to commence a global registrational phase three clinical trial of seralutinib.
A Solid Financial Position
Gossamer Bio, Inc. (NASDAQ:GOSS) has a solid financial position to carry its R&D through 2027, backed by cash and cash equivalents of $327 million, as of Q3 2024. The plus point for Gossamer is its revenue generation from the sale of licenses and contracts with collaborators.
Revenue Generation
- In Q3, the company generated $9.5 million in revenue, driven by its R&D contract with an Italian pharmaceutical firm, Chiesi.
Conclusion
Gossamer Bio, Inc. (NASDAQ:GOSS) ranks 3rd on our list of Best Penny Stocks To Invest In According to Media. While we acknowledge the potential of GOSS to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame.
Disclosure
This article is originally published at Insider Monkey.
