These 3 Small-Caps Should Be Able to Weather Tariff Turmoil

Tariff changes continue to wreak havoc on the markets. Last week, the S&P 500 had its worst weekly performance since September, dropping just over 3% on the week. The Nasdaq was off 3.5% as well. Small caps really got hit hard as investors went into a risk off mode, with the small cap Russell 2000 falling more than four percent on the week.

I am incrementally buying the recent dip in the market, primarily employing covered-call orders. Last week I added to several existing small-cap holdings as the markets provided nicely lower entry points. In today’s column, I highlight three small-cap names I have added exposure to in companies that see little impact from changes in tariff policies:

Let’s start with Corcept Therapeutics CORT, whose stock is now down over 20% from its recent highs in February. The company did post Q4 numbers last month that came in under consensus. But revenues were up some 40% in fiscal 2024. Management also sees at least 35% sales growth in the cards for fiscal 2025. Last week, the Food and Drug Administration accepted the New Drug Application submission for its cortisol modulator, relacorilant, to treat endogenous hypercortisolism. The schedule date for the approval decision is late in December. Canaccord Genuity, which put a $130 price target, and Truist Financial reissued "Buy" ratings on CORT last week, as well. The stock trades for $55.00 a share currently with the pullback.

Up next is Byrna Technologies BYRN, which is off a third from its highs in February. It should be noted that the stock had a massive rally before the recent pullback and was in overbought territory. Valuations are much more reasonable now. Last week, management disclosed that it expects total revenue for the fiscal first quarter of 2025 to be $26.2 million. This would represent a 57% year-over-year rise from the same period a year ago and was nearly $3 million above the consensus projection. Despite that, the stock fell over 10% last week as small caps got smacked around by the markets. Byrna gets almost all of its sales domestically, but is trying to ramp up sales in Canada and Mexico it should be noted.

The stock of Ocular Therapeutix, Inc. OCUL managed to buck the downward tilt of the markets last week to post a minor gain. But the stock is still down some 35% from its highs in October. Management provided an encouraging pipeline update last week. Five analyst firms including Bank of America and Raymond James reissued "Buy" ratings on the stock this week. Price targets proffered ranged from $15 to $22 a share. The stock currently changes hands at around $7.50 a share.

I am only incrementally putting my dry powder to work here as the stock market is hardly oversold, even with the recent pullback in equities. I also expect turmoil from tariffs to take some time to navigate through

At the time of publication, Jensen was long BYRN, CORT and OCUL