3 Small-Cap Stocks to Keep an Eye on

Growth investors should keep a keen eye on three small-cap stocks that could deliver outsized gains in 2022.

Big-cap stocks are generally solid investments, but not all deliver the best returns. Sometimes small-cap stocks are better performers and reward investors with enormous gains. The TSX has a wide selection of potential multi-baggers. Among the names you should keep an eye on are Aura Minerals (TSX: ORA), Fire & Flower (TSX: FAF), and Field Trip Health (TSX:FTRP)(NASDAQ: FTRP).

2021 TSX30 winner

Tech phenomenon Shopify was the top growth stock in 2020. Also, Canada’s largest publicly listed company made it to the TSX30 List in all three editions beginning in 2019. However, it did not capture the top spot in 2021 as many expected. Instead, it placed second to Aura Minerals.

The mid-tier gold and copper production company gold and copper producer has a market cap of $801.7 million compared to Shopify’s $233.5 billion. In the last three years, the mining stock’s total return is 837.56% (110.58% CAGR). As of December 1, 2021, the share price is $10.34.

However, Aura is not only a growth stock but is also a dividend stock. If you take a position now, the dividend yield is an ultra-high 9.59%. At the price of $1,873.25, Shopify pays zero dividends.  

Aura engages in the development and operation of gold and base metal projects in the Americas. Its gold and copper mines are in Brazil, Honduras, and Mexico.

NASDAQ listing

Diminutive Fire & Flower is undergoing share consolidation. The technology-powered, cannabis retailer hopes to qualify for a NASDAQ listing soon. According to its CEO, Trevor Fencott, the company can expand its shareholder base, increase flexibility, and enhance liquidity by listing across the border. It should also accelerate strategic growth.

Fencott added, “We have built an industry-leading cannabis consumer technology platform and, as demand for our technology platform continues to build in the U.S.” He believes it’s the perfect timing to advance Fire & Flower’s NASDAQ listing. Fencott said the shares will be more accessible to a larger investor audience.

The upcoming listing follows two strategic acquisitions. Fire & Flower bought Wikileaf, a trusted cannabis strain information destination. It also acquired PotGuide, a best-in-class dispensary, culture, and cannabis marketplace based in Denver, Colorado.

Barring any hitches, the NASDAQ listing should be complete in a matter of weeks. The company is ready to announce the continued growth of its cannabis consumer technology platform and execution of its asset-light business model. FAF trades at $5.04 per share.

Obscure health stock

Field Trip Health is obscure to many, but it won’t be long before the health stock generate interest or attract investors. The $253.7 million company develops and delivers technology-enabled psychedelic therapies in North America through the Field Trip Health Centres. It also offers Field Trip Digital apps and Field Trip Discovery. The latter is a drug development division developing the next generation of psychedelic molecules.

Management’s investment pitch is that Field Trip has one novel, synthetic psychedelic molecule in development. Even market analysts recommend a strong buy rating for Field Trip. They forecast the stock to climb from $4.38 to $13.61 — a return potential of 215.65% in 12 months.

Do not underestimate

Investors can’t underestimate growth-oriented, small-cap stocks and their potential to deliver outsized returns. The three names in focus are worth watching for.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify.

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