Small-cap companies (those with a market cap between $300M to $2B) often operate in overlooked corners of the market, developing new technologies, disrupting established industries, or dominating specialized niches that institutional investors haven't bothered to understand yet.
This institutional blindness creates real advantages for individual researchers. While Wall Street analysts chase mega-cap earnings beats, entire sectors of promising small companies trade at discounts to their potential. The best small-caps often solve specific problems exceptionally well, building competitive moats in markets too small for giants to care about.
Below are the highest rated small-cap stocks in our research portfolio.