On the night of the U.S. Presidential election, I was rudely awakened by an alert siren on my trading station. Stumbling out of bed, I could not believe my eyes. Dow Jones futures were down nearly 800 points!

#-ad_banner-#Just then my phone rang — my fund manager friend called to warn me that the market could be down another several thousand points by the end of the next day. Having followed his lead, I had a minuscule short position on in the futures and was thrilled with the huge gains earned by the short. Rather than doing the right thing by setting stops, I decided to go back to sleep and let the trade ride. Upon awakening,

I was shocked to see the trade almost back to even, crushing all of my gains.

The market panicked on the Trump win, but investors quickly realized their collective mistake and bought back into the market aggressively. The Dow has since rallied over 1,000 points to all-time highs. The move has confounded the bears and surprised even the most hard-core bulls.

In retrospect, the rally should not have been that surprising. Trump’s protectionist rhetoric, corporate tax slashing, and even pending inflationary pressure can help U.S. companies thrive. This will be especially true for smaller companies.

The Coming Small-Cap Rally
While the S&P 500 is higher by around 3% since the election, the small-cap Russell 2000 Index has rocketed approximately 12% in the same timeframe.

Greater protectionism and reduced global trade can help smaller firms, specifically those that typically earn less than 20% of their revenue from world trade. The global trade environment will encourage domestic buying, lifting the profits of companies that primarily serve the domestic market.

Smaller companies will also get a boost from Trump’s proposed tax policy changes. While large, multinational firms have the resources and geographic footprint to lower taxation, these advantages are simply not available to smaller companies. The proposed 15% corporate tax rate will give small businesses the same tax benefits long enjoyed by the big boys.

Finally, and perhaps most counterintuitively, climbing inflation can help small companies. When prices drop, companies earn smaller profit margins on their goods and services. The opposite happens in an inflationary environment. Firms will be able to increase their prices, earning higher profits and lifting the bottom line.

In other words, helping to level the playing field.

Luckily, these high-potential, small-cap stocks can be had for a reasonable price. I’ve located 5 such stocks trading for under $6.

Harmonic (Nasdaq: HLIT)
Harmonic is a video infrastructure company with a market cap of $390 million. It offers solutions for cable edge and access, as well as video processing, production, and play-out. Harmonic helps its customers to efficiently create, prepare, and deliver differentiated, high-quality video services while simplifying end-to-end asset management, reducing capital and operating expenses, and streamlining workflows.

The company has recently shifted its focus to software services and deferred subscription revenue. Third-quarter sales have climbed 21% year-over-year, but its losses widened from $0.05 to $0.21 over the same time frame. However, its outlook for the fourth quarter is solid, and I expect this company to continue to improve.

Action To Take: Buy now in the $5.30 per share zone with initial stops at $3.93 per share and a target price of $7.50 per share.

Office Depot (Nasdaq: ODP)
Shares of this office supply superstore chain plunged to $3.00 after the merger with Staples (Nasdaq: SPLS) was quashed by regulators. The company boasts a $2.5 billion market cap, and its stock is trading lower by over 26% in the last 52 weeks.

Buoyed by an unexpectedly positive third-quarter report, shares have surged higher to just below the $5.00 mark. Most bullish is Office Depot’s three-year growth plan that includes selling off of the international business to specialize in the U.S. market. Even better, a new CEO who is expected to focus on e-commerce is slated to start in 2017.

Action To Take: Shares have found support in the $4.80 zone. Buy now near $4.90 with stops at $3.73 per share and a target price of $7.50 per share.

Organovo (Nasdaq: ONVO)
The only biotech company on the list, Organovo specializes in cutting-edge 3-D printing of liver and kidney tissues. The tissues are used by biopharmaceutical companies to test their products for toxicity problems. Testing in this way can save companies billions of dollars, so it’s no surprise that seven out of the top 25 biopharmaceutical companies are already using Organovo’s products.

The company reported fiscal second-quarter total revenue of $1.4 million. Total revenue increased 358 percent versus the comparable period of fiscal 2016 and 54 percent versus the fiscal first quarter of 2017.

“The first half of fiscal 2017 represents a meaningful inflection point in our growth trajectory, as we more than doubled our product and service revenue when compared to all of fiscal 2016,” said Keith Murphy, CEO.

I am fully expecting great things from this company as it continues to gain traction across the large biopharmaceutical companies.

Action To Take: Enter long near $3.00 per share with a $12.00 per share target price. Initial stops are suggested at $2.47 per share

Groupon (Nasdaq: GRPN)
Groupon, once the darling of investors, has fallen on hard times. Shares are trading around 84% lower than its 2011 IPO. However, the advertising/e-commerce company with a market cap greater than $2 billion is set up to be an ideal buy candidate.

Groupon reported solid third-quarter results, beating estimates and increasing future guidance. North American gross billings were 6% higher as the company looks to cut the fat in under-performing nations.

Action To Take: Go long on an upside break of $3.85 per share. The target price is $7.00 per share and initial stops are suggested at $2.93 per share.

SuperValu (NYSE: SVU)
This supermarket chain has been beaten down deep into the value buy zone. Boasting a market cap of just over $1 billion and around $18 billion in annual sales, the major metrics just keep getting worse on the retail side of the business. However, the company recently spun off its Save-A-Lot stores with the understanding that it will continue to provide essential daily services to the chain. At the same time,

Supervalu’s natural and organic sales are increasing with the company expecting to increase its offerings in the space. Also, the company just signed a long-term agreement with America’s Food Basket to be a wholesale supplier. In addition, Whole Foods recently signed Supervalu to be its grocery wholesaler.

In other words, things are slowly improving for SuperValu and now is an ideal time to get long.

Action To Take: Enter long on an upside break of $4.85 per share. Initial stops are suggested at $3.91 per share, and our target price is $7.00 per share

Risks To Consider: There are legitimate reasons why each of these stocks is trading below $5.00 per share. While I think the upside potential is very strong, be aware that these stocks are precarious investments and suitable for risk-embracing investors only.

Editor’s Note: StreetAuthority’s experts have pinpointed over two dozen game-changing tech stocks in the last few years — but this year’s “Virtual Reality Revolution” is set to break all our past records… But first you have to know how to play it…