BMO says there's a buying opportunity in small caps, gives a list of the best ones to buy

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Small- and mid-cap stocks now have an 'extremely attractive' valuation after struggling to keep up with fiery gains from large-cap names, according to BMO.

The steady underperformance of small- and mid-capitalization stocks appears to be nearing an end after bouncing back this month, according to BMO Capital Markets. Since the start of the year, the S & P MidCap 400 index and S & P SmallCap 600 index have added 8.2% and 0.2%, respectively. The large-cap S & P 500, meanwhile, has gained roughly 9.5%. Over the past year, the small and midcap benchmarks are up 15% and 24%, respectively, while the large-stock index has soared 31%.

Take a look at a selection of those names below: DoorDash is a top stock included in BMO's outperform-rated SMID-cap portfolio, which includes several companies above the general SMID-cap market cap levels as it may have not been rebalanced yet. Shares of the food delivery company have soared more than 40% this year and about 132% over the past 12 months, giving the company a market cap of roughly $56 billion.

 

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