3 Small Cap Stocks to Own In December

A significant rotation in the stock market happened last week. The S&P 500 marked a 2.80% rise, but the gains were not evenly distributed — with small caps leading the charge with an 8.54% return.

Usually, these are the types of results you see when a major shakeup has already concluded. But that isn’t the case this time around. 

Despite the rally, small cap stocks have provided an average return of 11.24% since the start of the year, lagging significantly behind the S&P 500’s 16.21%.

Simply put, there’s still a lot of catching up to do — and with renewed hopes of a FED rate cut sooner rather than later, investors are shifting away from the stretched valuations of large-cap stocks toward more rate-sensitive small caps.

There’s just one issue — smaller companies tend to receive a lot less attention, so there’s less analyst coverage and in-depth research to lean on. However, there’s a solution for that…

Small Caps Stock Strategy

We use 115 unique factors to evaluate roughly 4,600 stocks each day. Those findings are distilled into a straightforward, user-friendly metric — a stock’s Zen Rating.

The highest rating, an A, equivalent to a Strong Buy rating, is only given to the top 5% of stocks. However, that means that there are roughly 230 tickers for you to consider on any given day. Thankfully, you can narrow the search down even further — you just have to turn to our Zen Strategies.

These are 11 exclusive, highly curated portfolios, each consisting of 7 stocks carefully picked to deliver market-beating returns.

Since small caps are on a run now, and still have room to grow, we’ll be taking a look at our Small Caps stock strategy.

This portfolio has an all-time annual return of 38.29% — however, it has beaten expectations thus far in 2025, as it has delivered a 57.69% gain since the start of the year.

Now, let’s take a look at 3 very interesting names from one of our top-performing strategies…

Nature’s Sunshine Products (NATR)

Our first pick for today is Nature’s Sunshine Products, a $360 million market cap supplement business. NATR has a Zen Rating of A, and is currently our top-rated stock overall. Yep, you read that right — rated 1st out of roughly 4,600. It’s also the top-rated stock in the Food industry, which has an Industry rating of B.

NATR’s last earnings call was on November 6, and marked the third consecutive quarter of outperforming earnings estimates. In fact, EPS came in at $0.36, blowing analyst expectations of $0.16 out of the water. Nature’s Sunshine Products shares have rallied by 48.59% over the past 30 days — but the stock is still trading at a modest P/E of 24.5x, which puts it in the top 2% in terms of Value.

However, what really sets it apart is the combination of high scores for both Value and Growth. In terms of the latter, NATR ranks in the top 4%. What’s more, Nature’s Sunshine boasts an immaculate balance sheet, with a debt to equity (D/E) ratio of just 0.59x — putting it in the 97th percentile when looking at Financials.

Everything we’ve seen from NATR points at a beat-and-raise cycle — and right now, you can get in at a solid discount.

OppFi (OPFI)

OppFi is a fintech platform whose mission is to expand credit access to millions of U.S. citizens left underserved by traditional lending institutions. That seems to be working out quite well — OPFI, which ranks in the top 1% of the stocks that we track (11th overall) has beaten earnings estimates for 11 quarters straight.

The company raised revenue, adjusted net income, and adjusted EPS guidance three times this year — so it won’t come as a surprise that it ranks in the 99th percentile in terms of Growth. However, it’s no slouch when it comes to Value, either, as it ranks in the 81st percentile in that department. Just like our previous entry, we also have a pretty healthy balance sheet, which puts OPFI in the top 1% for Financials.

Despite an impressive quarterly report delivered on October 30, where the business outperformed EPS estimates by 50%, OPFI has only notched a very slight 2.2% gain since — so there’s still time to lock in shares at a good price, but there’s no telling how long the opportunity will last.

Tactile Systems (TCMD)

Last but not least, we have Tactile Systems, a $574 million medical device company that, like our previous entries, ranks in the top 1% of the stocks that we track (14th overall). Last quarter, TCMD delivered double the EPS that analysts were estimating, and the stock ranks in the 84th percentile for Growth. However, it’s still trading at a decent P/E of 32.54x, below the market average, placing it in the top 13% for Value.

With that being said, the balance sheet is clearly the ace up Tactile Systems’ sleeve. Disciplined spending, expanding margins, and low levels of debt place it in the top 3% of equities in terms of Financials.

TCMD is seeing a lot of tailwinds at the moment — from outperforming estimates and the authorization of a new $25 million share buyback program to positive clinical trial data for new products. The business has missed estimates only once in the past 13 quarters — and with the recent beat in tow, plus a guidance raise, it’s looking like a proper return to form for Tactile Systems.

Interested In More Great Stock Picks?

The 3 stocks highlighted above are just a fraction of what you get from our proven Small Caps strategy. 

That’s because each day our system recalibrates — and Zen Strategies members get access to the 7 top Buy the Dip stocks based on 115 different parameters that point to outperformance. 

See all Top 7 Small Caps Stocks here > 

However, maybe you want more than just these low priced stocks. Perhaps you would like to see all 11 of our market beating strategies including Growth, Value, Momentum and our coveted AI Factor model. 

Each featuring the top 7 stocks.

Each featuring tremendous performance

We spell it all out in this timely presentation below that lives up to its name:

10 Minutes a Month to Beat the Market > 

What to Do Next?

• 77 Best Stocks NOW! >
• See All “A” Rated Stocks with +32.52% Average Annual Return >
• 2 New Stocks to Buy from Steve Reitmeister >

Want to get in touch? Email us at news@wallstreetzen.com.