<p><img src="https://static2.businessinsider.com/image/601d5a3890dd450018a7b0ed-1024/GettyImages-1077050374.jpg" border="0" alt="Traders and financial professionals work on the floor of the New York Stock Exchange" data-mce-source="Drew Angerer/Getty Images" data-mce-caption="Traders and financial professionals work on the floor of the New York Stock Exchange" data-link="https://www.gettyimages.co.uk/detail/news-photo/traders-and-financial-professionals-work-on-the-floor-of-news-photo/1077050374'adppopup=true"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>While investors have piled into <a href="https://www.businessinsider.com/stock-picks-to-buy-best-small-cap-growth-thesis-rbc-2021-2">small-company stocks</a> at a furious pace over the last couple of months, in some ways they're surprisingly hesitant.</p><p>Historically, those smaller stocks have tended to do better than larger ones as the economy comes out of recession and a new bull market begins. That's been the case lately, but Bank of America strategist Jill Carey Hall says valuations show that many investors are taking an overly cautious approach.</p><p>"Small cap cyclical sectors do not appear to be pricing in the recovery, trading at/near record discounts to defensive sectors," wrote Carey Hall, an equity and quantitative strategist. "With our economists' forecast for 6% US GDP growth (strongest since 1984), we see smaller stocks as a better way to invest in the economic rebound than larger stocks."</p><p>Carey Hall says the economy has moved from the early stages of a recovery into the middle stages of the cycle. That's still a period where small cap, risk, and value factors should work well. And confirming that thesis, she says risk factors were the best way to outperform in January.</p><p>She adds that today, there's also reason to believe smaller and less-expensive stocks are underappreciated.</p><p>"Low Price has tended to outperform in small caps for ~16 mos. (and by ~50ppt) following market troughs (vs. outperformance for less than a year/~30ppt today, suggesting potential for further upside)," Carey Hall wrote.</p><p>With those ideas in focus, Carey Hall names these companies as top picks. They're all "Buy" rated and rank in the top 20% of the <a href="https://markets.businessinsider.com/index/russell_2000">Russell 2000</a> based on their sensitivity to US GDP. They are also among the cheapest 40% of Russell 2000 stocks based on their valuations as measured by either price-to-book ratio, forward price-to-earnings ratio, or enterprise-value-to-sales ratio.</p><p>Those stocks are ranked from lowest to highest based on how much further they have to rise to meet Bank of America's 12-month price targets. Those figures were calculated based on Friday's closing prices as a way of showing how much upside the stocks could have.</p><p><strong>SEE ALSO: <a href="https://www.businessinsider.com/stock-picks-highest-short-interest-retail-squeeze-targets-goldman-sachs-2021-2" >GOLDMAN SACHS: These 40 heavily shorted stocks could be the next GameStop if retail traders target themand the group has already nearly doubled over the past 3 months</a></strong></p><h3>14. ArcBest</h3><img src="https://static5.businessinsider.com/image/602fdb627b571500189f6444-400-300/14-arcbest.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/arcb-stock">ARCB</a></p><p><strong>Sector</strong>: Industrials</p><p><strong>Market cap</strong>: $1.4 billion</p><p><strong>Forward price to earnings</strong>: 14.7</p><p><strong>GDP beta</strong>: 3.2</p><p><strong>Price target</strong>: $53</p><p><strong>Upside to target</strong>: -5.2%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>13. UMB Financial</h3><img src="https://static4.businessinsider.com/image/602fe3b98b93230018712717-400-300/13-umb-financial.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/umbf-stock">UMBF</a></p><p><strong>Sector</strong>: Financials</p><p><strong>Market cap</strong>: $3.8 billion</p><p><strong>Forward price to earnings</strong>: 14.2</p><p><strong>GDP beta</strong>: 0.1</p><p><strong>Price target</strong>: $84</p><p><strong>Upside to target</strong>: 3.8%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>12. Cracker Barrel Old Country Store</h3><img src="https://static6.businessinsider.com/image/602fdc3ad3570b001809287b-400-300/12-cracker-barrel-old-country-store.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/cbrl-stock">CBRL</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Market cap</strong>: $3.5 billion</p><p><strong>Forward price to earnings</strong>: 28.7</p><p><strong>GDP beta</strong>: 1.7</p><p><strong>Price target</strong>: $160</p><p><strong>Upside to target</strong>: 4.3%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>11. Retail Opportunity Investments</h3><img src="https://static5.businessinsider.com/image/602fe3f38b9323001871271c-400-300/11-retail-opportunity-investments.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/roic-stock">ROIC</a></p><p><strong>Sector</strong>: Real estate</p><p><strong>Market cap</strong>: $1.9 billion</p><p><strong>Forward price to earnings</strong>: 13.7</p><p><strong>GDP beta</strong>: 0.1</p><p><strong>Price target</strong>: $17.50</p><p><strong>Upside to target</strong>: 11.2%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>10. Helix Energy Solutions Group</h3><img src="https://static2.businessinsider.com/image/602fdefad3570b001809289a-400-300/10-helix-energy-solutions-group.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/hlx-stock">HLX</a></p><p><strong>Sector</strong>: Energy</p><p><strong>Market cap</strong>: $748 million</p><p><strong>Forward price to earnings</strong>: 206.0</p><p><strong>GDP beta</strong>: 0.1</p><p><strong>Price target</strong>: $5.50</p><p><strong>Upside to target</strong>: 12.0%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>9. Patterson</h3><img src="https://static4.businessinsider.com/image/602fdec0d3570b0018092899-400-300/9-patterson.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/pdco-stock">PDCO</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Market cap</strong>: $3.0 billion</p><p><strong>Forward price to earnings</strong>: 16.1</p><p><strong>GDP beta</strong>: 0.2</p><p><strong>Price target</strong>: $36</p><p><strong>Upside to target</strong>: 13.8%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>8. Louisiana-Pacific</h3><img src="https://static3.businessinsider.com/image/602fe1418b93230018712709-400-300/8-louisiana-pacific.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/lpx-stock">LPX</a></p><p><strong>Sector</strong>: Materials</p><p><strong>Market cap</strong>: $5.0 billion</p><p><strong>Forward price to earnings</strong>: 9.5</p><p><strong>GDP beta</strong>: 0.1</p><p><strong>Price target</strong>: $54</p><p><strong>Upside to target</strong>: 14.2%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>7. Urban Outfitters</h3><img src="https://static3.businessinsider.com/image/602fdd50d3570b0018092887-400-300/7-urban-outfitters.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/urbn-stock">URBN</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Market cap</strong>: $3.0 billion</p><p><strong>Forward price to earnings</strong>: N/A</p><p><strong>GDP beta</strong>: 1.1</p><p><strong>Price target</strong>: $36</p><p><strong>Upside to target</strong>: 18.7%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>6. Hibbett Sports</h3><img src="https://static3.businessinsider.com/image/602fdd8a7b571500189f6453-400-300/6-hibbett-sports.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/hibb-stock">HIBB</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Market cap</strong>: $1.0 billion</p><p><strong>Forward price to earnings</strong>: 9.7</p><p><strong>GDP beta</strong>: 0.8</p><p><strong>Price target</strong>: $78</p><p><strong>Upside to target</strong>: 20.0%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>5. Tenet Healthcare</h3><img src="https://static5.businessinsider.com/image/602fde077b571500189f6458-400-300/5-tenet-healthcare.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/thc-stock">THC</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Market cap</strong>: $5.3 billion</p><p><strong>Forward price to earnings</strong>: 10.9</p><p><strong>GDP beta</strong>: 0.5</p><p><strong>Price target</strong>: $64</p><p><strong>Upside to target</strong>: 25.6%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>4. Group 1 Automotive</h3><img src="https://static3.businessinsider.com/image/602fdcead3570b001809287f-400-300/4-group-1-automotive.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/gpi-stock">GPI</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Market cap</strong>: $2.7 billion</p><p><strong>Forward price to earnings</strong>: 7.6</p><p><strong>GDP beta</strong>: 1.2</p><p><strong>Price target</strong>: $187</p><p><strong>Upside to target</strong>: 25.7%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>3. Greif</h3><img src="https://static6.businessinsider.com/image/602fde86d3570b0018092895-400-300/3-greif.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/gef-stock">GEF</a></p><p><strong>Sector</strong>: Materials</p><p><strong>Market cap</strong>: $2.8 billion</p><p><strong>Forward price to earnings</strong>: 22.6</p><p><strong>GDP beta</strong>: 0.2</p><p><strong>Price target</strong>: $64</p><p><strong>Upside to target</strong>: 33.4%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>2. Owens & Minor</h3><img src="https://static5.businessinsider.com/image/602fe374a06a8e0018ce4442-400-300/2-owens-and-minor.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/omi-stock">OMI</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Market cap</strong>: $2.0 billion</p><p><strong>Forward price to earnings</strong>: 15.0</p><p><strong>GDP beta</strong>: 0.1</p><p><strong>Price target</strong>: $37</p><p><strong>Upside to target</strong>: 41.7%</p><p><em>Source: Bank of America</em></p></p><br/><br/><h3>1. Rush Enterprises</h3><img src="https://static3.businessinsider.com/image/602fde3cd3570b0018092891-400-300/1-rush-enterprises.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/rusha-stock">RUSHA</a></p><p><strong>Sector</strong>: Industrials</p><p><strong>Market cap</strong>: $2.2 billion</p><p><strong>Forward price to earnings</strong>: 22.6</p><p><strong>GDP beta</strong>: 0.2</p><p><strong>Price target</strong>: $61</p><p><strong>Upside to target</strong>: 48.1%</p><p><em>Source: Bank of America</em></p></p><br/><br/>
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