As small caps rocket higher to start 2021, here are Wall Street's favorite picks

Published Fri, Feb 5 202111:47 AM EST

(This story is for CNBC Pro subscribers only.) Small caps have taken off this year as investors bet on an economic recovery from Covid and look for riskier stock picks with more upside. The S & P Small Cap 600 is up more than 13% in 2021, as market participants wait on fiscal stimulus from the newly elected administrations to boost the most beaten down names from the pandemic. The Senate passed a budget resolution early Friday, moving one step closure toward passing a $1.9 trillion coronavirus relief bill. CNBC Pro screened for Wall Street's favorite small cap stocks with plenty of expected upside. The list is comprised of members of the S & P Small Cap 600 with more than 10% upside to their 12-month price targets. All of the listed stocks have at least five analysts covering them, with 75% of the analysts giving the companies a buy rating. Take a look at the list here. Coherus BioSciences , REGENXBIO , NMI Holdings , Dorian and TTM Technologies are all small caps that make CNBC's list. Video game stock Glu Mobile is one of the most-loved small cap stocks on Wall Street. The company is expected to rally nearly 30% in the next 12-months. Plus, more than 80% of analysts that cover the stock give it a buy rating. Mark Tepper, president and CEO of Strategic Wealth Partners, said Glu Mobile is a favorite of the video game companies, since it is behind phone-based games such as Kim Kardashian: Hollywood , Deer Hunter and Diner Dash. "From a valuation standpoint, it's pretty attractive when you compare it to its peers as well. So I'd say Activision and Glu, those are the two best ways to play it," Tepper told CNBC in December . PDC Energy , Axcellis Technologies , Flagstar , Ichor Holdings , Cytokinetics , Viavi Solutions and OSI Systems are also smaller stocks that Wall Street is betting will rally in 2021. Another favorite small cap on Wall Street is Vista Outdoor . The sporting goods maker's stock is up nearly 30% in 2021 but analysts expect to see it jump nearly 15% over the next year. Plus, 90% of its analysts have a buy rating on the stock. Vista Outdoor CEO Chris Metz said the company has benefitted from the pandemic with more Americans wanting to get outside more during the Covid-19 lockdowns. "What we have seen in the last 90 days is actually a strengthening in demand...as we look at the sustainability of some of the outdoor activities," Metz told CNBC's "Squawk on the Street" on Thursday. "We expect this to continue as people are enjoying the activities." Regional airlines SkyWest is another stock expected to gain more than 10% in the next 12-months as airline travel returns to normal following the pandemic. ArcBest , Cohu , Pacific Premier , Digi International , Mr. Cooper and Independent Bank Group are another handful of loved small caps stocks for 2021.

SkyWest ranked as the second best U.S. airline, according to WalletHub.

SkyWest Airlines

(This story is for CNBC Pro subscribers only.)

Small caps have taken off this year as investors bet on an economic recovery from Covid and look for riskier stock picks with more upside.

The S&P Small Cap 600 is up more than 13% in 2021, as market participants wait on fiscal stimulus from the newly elected administrations to boost the most beaten down names from the pandemic. The Senate passed a budget resolution early Friday, moving one step closure toward passing a $1.9 trillion coronavirus relief bill.

CNBC Pro screened for Wall Street's favorite small cap stocks with plenty of expected upside. The list is comprised of members of the S&P Small Cap 600 with more than 10% upside to their 12-month price targets.