NVEC

The Russell 2000 has underperformed the S&P 500 by falling 5.6% over the last three months as investors flee small caps due to rising interest rates. However, this weakness may present buying opportunities. Two small cap stocks highlighted are Catalyst Bancorp, a Louisiana bank trading at a cheap P/B ratio of 0.88, and NVE Corp., a spintronics technology company with strong 78% gross margins and a 5.9% dividend yield despite recent stock weakness.

Block & Leviton is investigating NVE Corporation for potential securities law violations, alleging that the company or its executives misled investors about financial performance and business outlook. NVE reported a dramatic 47% revenue decline in Q2 fiscal 2027, with stock falling 30.6% on October 22, 2026. The firm is seeking to recover losses for affected investors.

NVE reported first-half fiscal 2027 revenue of $16.9 million, up 36% year-over-year, driven by strong commercial demand and 67% growth in distributor sales. The company launched new gear sensors for robotics and factory automation applications. Near-term headwinds in medical and defense segments are expected to be temporary, with management projecting second-half revenue to match first-half levels.