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14 Undervalued Small-Cap Stocks

These stocks all have narrow or wide economic moats and are undervalued by our metrics.

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Small-cap stocks are as popular with investors as BTS is with teenage girls: As of this writing, the Morningstar US Small Cap Index is outpacing the broad Morningstar US Market Index by 7 full percentage points so far this year. After lagging the broad market rebound in 2020, smaller companies staged a comeback in the latter part of that year and have been on a roll ever since.

"Small-cap stocks lagged the broader market in 2020 as investors were concerned about their ability to survive the pandemic,” notes Morningstar chief markets strategist Dave Sekera. “But now, with the vaccine rollout well on its way and a clear pathway to economic normalization on the horizon, small-cap stocks have outperformed as the market is pricing in a strong earnings rebound in the near term."

Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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