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In our top small cap stocks for the year, the team talks through their personal favourites and what they think will be hot next year. As a note, these are stocks with a market cap circa £1bn and below.

Phil Rogers

2022 Pick: Card Factory (LSE:CARD)

With a share price that has tumbled some 80% over the past five years, the Card Factory wasn’t always a small cap stock. However, with a market cap that sits under £200m, the company is in a different place. Over the past year, the share price has risen by 19%, fuelled by the ongoing transformation to make the company more omnichannel when it comes to card and gifting.

This model, pushing online sales as well as in-store purchases, should make the business more protected against the decline of the broader high street. It should also cushion the impact of any further lockdowns from Covid-19 in the future.

The business is also offering a more broader range of products aside from the traditional card business of five years ago. For example, this include party items and special event gifting.

We feel that 2022 could be the breakout year for the stock, as the transformation finally starts to pay dividends.

Jesse Williamson

2022 Pick: Stran & Co (NASDAQ:STRN)

Stran & Co is a recent IPO that has been on our radar since its release. They are a market leader as a distributor of promotional products and branded merchandise. The company has more than 27 years experience. The company has a strong client base, made up of over 30 Fortune 500 companies.

STRN has now closed out of their quiet period. They started by announcing an appointment of Steve Paradiso, an industry veteran, to their management team. Mr. Paradiso brings to Stran an impressive track record of developing and executing growth strategies within the promotional products industry and will be instrumental in Stran’s growth. We expect to hear more news in the upcoming weeks from the company.

The stock rallied away from $3 and reached a high of $6.99 in two weeks. The float that the stock has, around 4.5 millions shares, will allow the price to rise quickly as more bullish sentiment grows. As a recent IPO, there is low risk of an offering, which often hinders the momentum of small caps.

We think that Stran & Co is a top pick going into 2022 and can reach double digits in the short term.

Robert Henrik

2022 Pick: Oxford Biomedica (LSE:OXB)

Oxford Biomedica (LSE:OXB) is a biotech company on the FTSE250, which started as a spin-off project from the University of Oxford. The firm specialises in gene-based medicines for diseases such as Parkinson’s and was also a consortium member for developing and manufacturing the Oxford-AstraZeneca COVID vaccine.

The stock has had a strong year, starting at 1000p and peaking at 1600p. A recent sell-off now looks overdone and the stock has found strong support and currently trades at the 1200p mark. The institutional community is still very bullish on the stock, as a Bloomberg survey of equity research analysts indicates that 71% of analysts currently have a “BUY” rating on OXB, and a 12-month consensus target price of ~52% upside from the current levels.
The financials are also looking increasingly strong with accelerating revenue growth. H1 21 revenues grew 140% in year-on-year terms.

Whilst OXB shot to fame primarily with their successful role in the COVID-19 vaccine, the firm’s experience and expertise in the development and manufacture of commercial scale lentiviral vectors (LVVs) will allow OXB to broaden their revenue portfolio and treat a much wider range of conditions in the gene therapy space. It already partners with key players such as Navartis and AstraZeneca and this looks to expand further in the future.   

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