New Trade for January 19th, 2024

Goldman Sachs’ has highlighted an interesting trend for investors in 2024: the potential outperformance of small-cap stocks. The Russell 2000, representing these smaller companies, is projected to see a 15% rise over the next 12 months, outpacing the S&P 500’s expected 8% gain. This prediction holds even if the economy grows slower than the anticipated 2.3% GDP increase, thanks to the small caps’ low valuations.

The firm notes that the primary risk lies in a potential downturn in investor expectations for economic growth. However, the current low valuations of small-cap stocks offer a safety net, suggesting they could still yield positive returns even if GDP growth falls short of forecasts.

A standout in this category is Tegna, a broadcast and digital media company trading under the name Gannett Co Inc. (TNGA). Despite a challenging 2023 where it saw a nearly 28% drop, Tegna is already showing signs of recovery in 2024, with a modest gain of just over 1%. The company’s forward 12-month P/E ratio of 4 and trailing 12-month P/B multiple of 1.0% are significantly lower than its performance over the past five years, indicating a potentially undervalued stock.

Adding to Tegna’s appeal is its recent renewal of an affiliate agreement with NBC, extending its reach in 20 markets and covering about 17% of U.S. households. This move could bolster Tegna’s position and make it an attractive option for investors looking to tap into the potential of small-cap stocks in 2024. For those seeking growth opportunities beyond the usual large-cap names, Tegna and similar small-cap stocks could offer a promising avenue in the current market landscape.

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You could buy TNGA shares outright, but for our less risk-averse readers, considering an options trade could offer the potential for quicker, higher gains. Ready to up the ante? Trading options on TNGA could be your next bold move. Click here to learn how


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