4 Stocks to Buy Before They Take Off

50 snips

Sep 15, 2025

The potential impacts of the Federal Reserve's interest rate cuts are under scrutiny, with key earnings reports from companies like FedEx and Darden Restaurants on the horizon. Oracle's surprising forecast sparks nostalgia for late-90s tech booms. Small-cap stocks are highlighted as undervalued opportunities in a saturated market. Special guest Bryan Armour shares insights on investing in smaller companies through ETFs. Lastly, the utility and real estate sectors are discussed as attractive options amidst changing economic conditions.

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ADVICE

Mind Fees And Trading Costs In Small-Cap ETFs

Prioritize ETF cost and hidden trading expenses when choosing small-cap funds.
Avoid funds that trade heavily in microcaps without buffers to limit transaction costs.

ADVICE

Choose Broad Passive Or Systematic Active ETFs

Favor passive or broad systematic active small-cap ETFs over narrow active concentration.
Active ETFs that are broad and systematic (e.g., Dimensional, Avantis) can mitigate flow and concentration risks.

ADVICE

Know The Index Behind The ETF

Understand the index methodology and portfolio composition before buying a small-cap ETF.
Different indices (Russell, S&P 600, CRSP) yield different sector/style exposures and profitability screens.

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On this week’s episode of The Morning Filter, Dave Sekera and Susan Dziubinski discuss how big the Federal Reserve’s interest cut this week might be and what to listen for in Fed Chair Jerome Powell’s comments. Recent stock pick Lennar LEN reports earnings in the next few days, and Dave explains why he’s watching for results from FedEx FDX and Darden Restaurants DRI this week, too.

Oracle’s ORCL shockingly strong forecast drove investors wild last week but left Dave feeling very late-1990s; tune in to find out exactly what that means. They also unpack earnings results from Adobe ADBE, Chewy CHWY, and several companies viewers and listeners have been asking about.

Small-cap stocks remain an undervalued pocket in a fairly valued market. Special guest Bryan Armour, Morningstar director of ETF and passive strategies research, argues why stock investors would be wise to invest in smaller companies via an ETF and shares several of his picks. And Dave’s stock picks this week are undervalued small-cap stocks to buy before they rally.

Episode highlights:

Is Oracle Stock Worth the Hype?

Lightening Round: Earnings Season Recap

Undervalued Small-Cap ETFs to Consider

Stocks to Buy Before They Rally

Read about topics from this episode.

Read Dave’s stock market outlook: https://www.morningstar.com/markets/stock-market-outlook-where-we-see-investing-opportunities-september

Learn more about Morningstar’s approach to stock investing: Morningstar’s Guide to Investing in Stocks

Read the earnings note for Oracle: https://www.morningstar.com/stocks/oracle-earnings-skyrocketing-ai-data-center-demand-fuels-outlook

Got a question for Dave? Send it to themorningfilter@morningstar.com.

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Viewers who’d like more information about any of the stocks Dave talked about today can visit Morningstar.com for more details. Read more from Susan Dziubinski and Dave Sekera.

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