Small Cap Revival: 2 Under-the-Radar Stocks Set to Break Out?!

Hey everyone, it is Julie here with TipRanks and today we're taking a look at two strong buy small cap stocks with big upside potential and a 10 out of 10 score. So, let's get into it. All right guys, welcome back. Thank you all so much for being here. Today we're diving in to two small cap stocks that Wall Street sees some big upside potential in. One just locked in over a billion dollars in long-term contracts and the other just swung from a big loss to a big profit. Now, of course, small cap stocks do have a lot of potential for upside, but they do also come with some risks. So, while these stocks do have some great tailwinds, they do still face some headwinds as well and we're going to get into the pros and cons of each, but just always keep in mind these risks and do your own research and due diligence. I found today's stocks using TipRanks stock screener. Found under the screener menu, I put in a few different filters including a small market cap, a 10 out of 10 smart score, double-digit upside potential and a strong buy analyst consensus to get my list of companies below. You can check out the stock screener for yourself on the TipRanks website or right on the TipRanks mobile app. And right now to celebrate the 4th, TipRanks is having a 70% off sale. So, if you've been wanting to unlock some premium investment research tools, now's a great time to do so. Links will be in the pinned comments below and if you enjoyed today's video, make sure you hit that thumbs up button and that you're subscribed to the channel. Let's dive right into our two strong buy small cap stocks. First up, we're taking a look at Hallador Energy Company. They trade under the ticker HRNG, currently priced just above $17 per share. The stock has gained 10% in the past year and is up about 4% in the last 3 months. They score a 10 out of 10 on the TipRanks smart score with both increased hedge fund activity and insider transactions and positive crowd wisdom. Hallador Energy has primarily been a coal producer, but they have been transforming themselves over the past several years to become an independent power producer. They are an Indiana-based energy company that owns and operates coal-fired power generation primarily through their Merom power plant while also selling coal to third-party customers. But they have been repositioning themselves as a multi-fuel independent power producer with management actively evaluating natural gas and dual-fuel capabilities to diversify beyond coal. What makes Hallador interesting right now is its push into long-duration capacity contracts with utilities locking in revenue years and even decades into the future at a moment when electricity demand from data centers and AI infrastructure is putting real pressure on grid capacity. Now, let's get into their most recent earnings report. They shared their Q1 on May 5th and it wasn't perfect, but there were some big highlights. They did post a wider than expected loss per share of 20 cents and revenue came in at 108 million while they posted a net loss of 9.3 million largely because of temporary operational constraints at the Merom plant. On the positive side though, they announced a 12-year capacity agreement expected to generate more than 1 billion in contracted revenue. And the company now has roughly 14 years of forward capacity commitments giving investors far greater visibility into their future cash flows. The company also eliminated all outstanding bank debt and boosted liquidity to nearly 100 million dollars. And it's important to note that there is a planned maintenance outage at Merom underway right now. So, the next quarter will reflect that headwind before things are expected to improve in the second half of the year. But that has not stopped analysts from increasing their price targets. We just had an analyst at Northland reiterate their buy rating after they weighed in a couple months ago. And at that time, they had boosted their price target by $5 after the company announced the sale of substantially all its remaining capacity through the summer of 2028 at pricing that was almost double their current contract book. The firm saw this as potentially just part one of an additional one to two deals with some potential customers looking for 10 plus year deals. And as we know, a 12-year deal soon followed. Hallador Energy does just have three current analyst ratings, but they do all give the stock a buy. And the average price target of $28 implies an upside potential of 62% Looking at those price targets down below, they range from an upside of 27% from back in April to our more recent rating here in June with an upside of 97% and for our second stock, we're taking a look at McEwen Mining. They trade under the ticker MUX, currently priced just above $18 per share. Their stock did gain 63% in this past year, but has dropped about 12% in the last 3 months. They score a 10 out of 10 on the TipRanks Smart Score, also with increased insider transactions and hedge fund activity and positive crowd wisdom. McEwen is a precious metals mining company with gold and silver operations across North and South America. While they produce both gold and silver, one of their biggest long-term assets is its ownership stake in McEwen Copper, which is developing the massive Los Azules copper project in Argentina. That gives investors exposure not only to precious metals, but also to copper, which is a metal expected to benefit from electrification and AI infrastructure growth. McEwen's near-term story is about ramping up production at existing mines, while their long-term story increasingly centers on Los Azules. McEwen Mining shared their Q1 earnings report on May 6th, and it was one of their strongest quarters in years. Revenue more than doubled to $74 million while the company swung from a loss a year ago of 33.4 million in net income. Adjusted EBITDA climbed to nearly 45 million and earnings per share of 56 cents comfortably beat analyst expectations. The company's seeing strong leverage to higher gold and silver prices and healthy operating cash generation. But of course there are still some risks that should be watched. Mining costs did increase and the company still carries more than 120 million in long-term debt. And a significant portion of their quarterly earnings came from their San Jose joint venture rather than wholly owned operations. One of their headline stories is really their Los Azules mine. The project secured a 30-year fiscal stability agreement in Argentina and completed a feasibility study showing a $2.9 billion after-tax net present value at current copper price exemptions. And that number jumps to $6.3 billion if copper prices move higher. In the last month or two we've had a few analysts reiterate their buy ratings including one at Alliance Global who initially increased their price target back in March. They noted solid 2025 results that featured a more than doubling of their EBITDA relative to 2024 figures. They view the company's portfolio of operating assets as now appearing to be on stable footing. Once again, we do just have three current analyst ratings but another unanimous strong buy and the average price target of $31.83 implies an upside potential of 74%. Looking at those ratings down below, they range from an upside of 61.5% to 91.5%. So that is a quick look at two small cap stocks both with a strong buy consensus from Wall Street. Each stock has their own pros and cons but analysts seem to be feeling bullish. Let me know which of these stocks you'd put on your watch list in the comments down below. And of course keep in mind these videos are never suggestions to buy or sell any specific stock. So, please make sure you always do your own research and due diligence, especially with small cap stocks like this. Thank you guys so much for watching. Have a wonderful day, and I'll see you back here next time.