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6 Undervalued Small-Cap Stocks With Momentum

These narrow- and wide-moat names are beating the market this year yet remain undervalued according to our metrics.

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Here at Morningstar, we talk a lot about the dangers of chasing performance. For instance, our annual analysis of the investor returns of mutual funds illustrates that while the gap between investor returns and total returns has been shrinking, investors still often make timing mistakes--and that drags down their investor returns over time. In fact, we’ve even studied how adding “unloved” categories (those mutual fund categories that aren’t currently popular) to the fringes of a portfolio can add value.

As such, an article suggesting that investors consider stocks that’ve soared seems out of character from Morningstar. But hear us out.

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