3 small cap stocks to buy now and hold for the long term

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Are you looking for a way to protect yourself against soaring inflation? Here’s one you might not have considered yet.

Small-cap stocks tied to nimble companies that can pivot quickly in times of crisis are particularly appealing right now. Since October 27, 2021, monitoring of small cap stocks Russel 2000 the index is up 6.8%. This is more than double the gains produced by large cap stocks following the S&P 500 index over the same period.

Just because a company is relatively small does not mean that its share will increase in an environment of high inflation. For reasons of their own, these three could be huge winners for patient investors who buy now and hold for the long term.

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Renalytix

An estimated 37 million Americans are currently living with chronic kidney disease (CKD). Medicare spends around $ 120 billion to treat this population each year and would like to spend much less.

Renalytix (NASDAQ: RNLX) and its KidneyIntelX diagnostic service can do a lot to help Medicare reduce its IRC burden and save shareholders a lot of money in the process. This company’s first-class diagnostic platform uses artificial intelligence to compare the results of blood samples with information in the medical record and known genetic markers.

For about $ 950 per KidneyIntelX result, doctors are given a patient risk score that they can use to predict progressive kidney decline. With patient risk scores in hand, healthcare plan sponsors can direct their limited resources to patients most likely to get worse quickly without intervention.

Treating disorders that lead to kidney damage doesn’t come cheap, but medications and frequent check-ups are much cheaper than dialysis. Preventing a patient with early-stage CRF from getting worse enough to require a transplant can save Medicare millions over a patient’s life.

Renalytix is ​​still a small cap stock as KidneyIntelX sales for the fiscal year ended June 30, 2021 were $ 1.5 million. It won’t happen overnight, but it’s only a matter of time before healthcare plan sponsors across America learn to save heaps with this exclusive kidney monitoring diagnosis. company.

Three people looking at a laptop in the office.

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Ocular therapy

Each year, more than 4 million Americans undergo cataract surgery. Ocular therapy (NASDAQ: OCUL) makes Dextenza, a tiny piece of drug-eluting gel that ophthalmologists slip into patients’ tear ducts after eye surgery.

The company launched Dextenza shortly before the COVID-19 pandemic reduced procedural volumes. Despite the challenges, the launch is going well. In the third quarter, Dextenza sales more than doubled year over year to $ 11.9 million.

In October, the United States Food and Drug Administration (FDA) expanded the addressable patient population for Dextenza to include patients with allergic conjunctivitis. This expansion from the post-surgical setting could be a very big problem for Ocular Therapeutix. Doctors can now be reimbursed for administering Dextenza to patients who come for a simple visit to the office.

In the postoperative context, sales of Dextenza have only scratched the surface, and sales to people with allergic conjunctivitis or chronic conjunctivitis are only just beginning. With two paths to profitability, Ocular Therapeutix has what it takes to make big gains in the years to come.

Doctor showing scan images of a patient.

Image source: Getty Images.

Nano-X Imaging

With an efficient way to produce x-rays, Nano-X Imaging (NASDAQ: NNOX) could eventually become one of the main suppliers of medical imaging equipment. Computer Assisted Tomography (CT) has come a long way in the 21st century. The source of the x-rays that produce these images, however, still relies on heating a metallic filament to 2,000 degrees Celsius.

Nano-X Imaging’s flagship system, the Nanox.ARC, produces X-rays with silicon chips that use modest amounts of electricity. Single source Nanox.ARC has already been approved by the FDA, but the company’s first attempt to gain approval for a multi-source device has not worked.

A hazy timeline to resubmit a multi-source device to the FDA combined with a lack of revenue makes it a very high-risk stock at the moment. Acquiring the x-ray equipment market, however, could be so lucrative that the risk is probably worth it.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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