It’s no secret that small-cap stocks have been on fire lately. With the iShares Russell 2000 ETF (NYSE: IWM) up close to 10% on the quarter and the overall market trading near 52-week highs, it’s become a risk-on environment, and capital has quickly been flowing into traditionally higher-risk stocks like small caps.
As speculative capital appears to have returned and small caps are quickly gaining traction and volume, two names from last week, in particular, stand out for their impressive performance.
Vinco Ventures (NASDAQ: BBIG) and Guardforce AI (NASDAQ: GFAI) performed impressively last week, almost doubling in market value. Should these two stocks be on your investment radar, or are they just gaining off the newfound excitement in small caps?
Vinco Ventures is a media and technology company based in the United States. The company has a market cap of $63.7 million and a float of 12.4 million shares. The company specializes in developing and licensing intellectual property in the entertainment industry. Vinco has several potential growth opportunities and a development pipeline of new products and services, including new virtual reality experiences and licensed merchandise.
Up until early July, the stock had a year to forget, trading down significantly in a steep downtrend. However, the stock has surged almost 270% in the past month and close to 100% over the past five days, with no specific catalyst causing the move. While the stock remains in negative territory on the year, down 44% year-to-date, the recent price action is undoubtedly positive.
From a technical analysis perspective, if BBIG can continue to trade above the downtrend and digest the recent surge higher by consolidating and forming an uptrend, momentum might build for further upside in the long term.
It’s too soon to say whether the momentum will continue, though, as shares remain below the 200-day SMA and currently have an overbought RSI of 83.78. Indeed, it’s one to watch going forward, especially if the volume continues to rise and shares find support at recent prices.
Guardforce AI has been a leading provider of comprehensive cash solutions and handling services in Thailand. The company is expanding its offerings to include AI and robotic solutions, leveraging its strong foundation and secure logistics. The company aims to enhance operational efficiency and establish a prominent presence in the Asia Pacific region and eventually worldwide by developing innovative AI and robotics technologies.
Last Thursday, Guardforce announced that it partnered with leading security provider Concorde Security to co-launch a new robotic security solution in Singapore. The news resulted in its stock price soaring higher amid increased volume.
With a float of just 1.5 million shares and a market cap of $41.28 million, it’s no surprise that GFAI has experienced significant volatility this year, especially as the company finds itself operating in arguably the hottest industry in the world, AI.
The stock's 52-week range includes a low of $3.81 and a high of $36.90, with the stock currently up 67% from the 52-week low. Thanks to the recent surge higher, YTD stock is now up over 25%.
Considering the GFAI’s float size and micro market cap, investors should conduct thorough due diligence before considering an investment. From a technical analysis perspective, if the stock can reclaim $8, turn resistance into support, and base above a flattening 200-day SMA, things could firm up. Such a move might signal a shift in trend and momentum.