These are the favorite holdings of small cap stock pickers, according to RBC analysis

Published Sun, Mar 14 20218:55 AM EDT

The historic economic rebound is sending stock pickers bargain-hunting in the small-cap space, and many fund managers are flocking to some of the same names, according to RBC Capital Markets. The Wall Street firm made a list of "darlings of small cap," which is made up of the most popular stocks in small cap funds. RBC Capital Markets combed through 466 actively managed equity funds that are focused on small caps and found the most popular names among the portfolio managers. All of the stocks are as of the fourth quarter of 2020 form the most recent regulatory filings. While small-caps at large have outperformed this year (the Russell 2000 is up more than 18% in 2021) due to a shift to cyclical names in hopes of a robust recovery from the pandemic, the names on RBC's list have struggled this year. This is mainly because these are highly-valued small caps, the firm noted. "The performance woes have occurred as riskier, lower quality, and more cyclical parts of the US equity market and Small Cap universe have been outperforming," RBC Capital Markets head of U.S. equity strategy Lori Calvasina told clients. "This doesn't surprise us, since many active managers in Small Cap tend to bias their portfolios to higher quality names." Take a look at the "darlings of small cap" list here. Emergent BioSolutions remained number one on the list from the third quarter of 2020, the firm noted. The healthcare name is a behind-the-scenes player in the U.S. coronavirus vaccine program. Emergent BioSolutions has built capacity to produce vaccines from AstraZeneca and Johnson & Johnson around the clock. "We are operating at a level where our capacity is well in access of 1 billion doses annually for those products," the company's CEO Bob Kramer told CNBC earlier this month . Despite the major contracts with Johnson & Johnson and AstraZeneca, the company's stock is about flat for the year. Yet, about two thirds of the analysts that cover the stock give it a buy rating. Other healthcare names on the list include LHC Group , Repligen , HealthEquity , Natera , Halozyme Therapeutics , Neogenomics , Omnicell and AMN Healthcare Services . Health-savings company HealthEquity announced its acquisition of Luum earlier this month. KeyBanc Capital Markets said this could be the first of a series of acquisitions that help build out HealthEquity's commuter benefits offerings. The Wall Street firm also said HealthEquity has "significantly improved its balance sheet as a result of the Company's recent add-on equity offering." Lithia Motors , Helen of Troy , Q2 , SiteOne Landscape Supply and Trex are the other names on RBC's list. Analysts believe SiteOne Landscape Supply, a wholesale distributor of landscape supplies, is set to benefit from the de-urbanization trend caused by the pandemic. Deckers Outdoor , QTS Realty Trust and STAG Industrial fell off the "darlings of small cap" list from last quarter, RBC noted. — with reporting from CNBC's Michael Bloom.

Emergent BioSolutions Vice President Dino Muzzin holds a product sample of BioThrax, the only FDA-licensed vaccine available for pre-exposure protection against anthrax infection.

Ryan Garza | Detroit Free Press | AP

The historic economic rebound is sending stock pickers bargain-hunting in the small-cap space, and many fund managers are flocking to some of the same names, according to RBC Capital Markets.

The Wall Street firm made a list of "darlings of small cap," which is made up of the most popular stocks in small cap funds.