From July 29 to August 5, the Dow Jones Industrial Average and S&P 500 took their biggest weekly losses of 2019 so far – 5.8% and 6.2%, respectively.
Despite this, one of the best small-cap stocks to buy now could still pop for a 130% gain.
This is a stock that can carry investors through thick and thin – in fact, it already has.
The company actually managed to boost its market share in the wake of the 2008 financial crisis. While competitors were hoarding cash, these guys rolled out an entirely new line of products in 2010.
And that's part of what makes it a top small-cap stock to buy – this company's products are in demand no matter what the economy does.
So even if the broad market averages continue to decline, we expect this stock to keep moving up.
And if the market performs well… that only means our top small-cap stock is poised to outdo them.
Plus, almost every measure used in stock market analysis shows this stock is selling below its value.
So you know the jump is coming. It's just a matter of when.
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And lucky for you, we've confirmed it's going to happen very soon.
Our proprietary Money Morning Stock VQScore™system has helped us condense this stock's earnings power into a single number – a phenomenal 4.4 out of 4.9 – meaning that 130% gain is right around the corner.
So here's the small-cap stock that's ready to soar at any moment…
The Best Small-Cap Stock to Buy in Any Economy
American Woodmark Corp. (NASDAQ: AMWD) is a top manufacturer of kitchen and bathroom cabinetry.
AMWD is vertically integrated, so it can control the process of production at every stage. It begins with harvesting hardwood in Appalachia and ends with delivering the finished product to customers.
This company's diversification is part of what keeps it so strong under various market conditions. It has a robust presence in two channels: new construction and remodeling.
When the purchase of homes is strong, it is positioned to benefit from new installations. When overall home purchases fall, it benefits from remodeling.
In the 2008 to 2009 Great Recession, AMWD accrued sufficient cash flow to roll out a new brand, Waypoint Living Spaces. The brand was oriented toward the dealer channel, which focuses on remodeling and not new construction.
The recession would eventually give way to strong demand that had built up when people were tightening their belts. Then, the company could meet demand through the remodeling channel.
This strategy proved successful. The remodeling channel is now the industry's biggest, and American Woodmark is one of the leading North American cabinet makers – its yearly sales have topped $1.6 billion.
But the company still has an expansion opportunity. The Home Improvement Institute forecasts a 5.5% climb in spending on home improvement this year in the United States to $420 billion.
Plus, over 1.2 million single-family homes are forecast to be built over the next two years, which will also benefit AMWD's construction silo.
All these reasons support the long-term purchase of AMWD stock. But here's why it's gaining big in the near term.
AMWD's net revenue has grown 21% for the fiscal year, but it's expected to advance 32% to 33% further. The company's reported earnings per share have also skyrocketed 83%.
But this stock's biggest gains lie ahead.
AMWD has estimated its free cash flow this fiscal year at $135 million, a whopping increase over last year's $37 million. This provides the company the flexibility to grow and experiment with new products and channels, as it did in the 2008 to 2009 period.
The company's price-to-book ratio is only 43.5% of the average for the industry, at 2.24, confirming it's hugely undervalued.
AMWD currently trades at $82, and some analysts say it will climb 19% to $98.
But if it were to trade at the industry average, AMWD would need to gain 130%. That means it could reach higher than $106 within the year.
And with this stock's dynamite 4.4 VQScore, investors should be more than hopeful of that 130% jump.
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This article is supplied courtesy of Money Morning.