At the end of the year, Wall Street investment banks began to look forward to the investment direction of the new year."small cap stocks" has become one of the high-frequency words in their words.

Institutions seem to have reached a consensus that small-cap US stocks are expected to outperform large-cap stocks in the coming 2023:

The research teams of Morgan Stanley, Goldman Sachs Group and Bank of America all agree that small-cap stocks have obvious advantages over large-cap stocks in valuation and are more likely to benefit from high inflation and industrial chain restructuring brought about by deglobalization.

So shunning large technology stocks and sifting out companies with relatively healthy debt structures in small-cap stocks may be one of the good strategies for next year.

BofA said small-cap stocks outperformed the broader market in the three recessions of the 1970s and 1980s, during which the Fed was also fighting high inflation.

As a result, analysts selected 20 stocks with the most upside potential from the S & P small-cap 600 index.

Among them$ModivCare (MODV.US)$、$Ligand Pharmaceuticals (LGND.US)$、$Customers Bancorp (CUBI.US)$Potential growth of more than 60% over the next 12 months$Outfront Media Inc (OUT.US)$、$SMART Global (SGH.US)$、$Pacira BioSciences (PCRX.US)$、$Adtran (ADTN.US)$Potential increases are all more than 50%.

BofA judged that small-cap stocks have fully priced a "deep recession" and that further declines in small-cap stocks should be more limited than large-cap stocks, and that when the market bottoms out, it is usually the most promising time for small-cap stocks to "take off."