11 Small-Cap Stocks Analysts Love the Most

Small-cap stocks are in far worse position than their larger brethren in 2020. But despite the perilous environment, Wall Street still sees opportunity in a few select small caps.

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Investors in stocks with small market values know all too well that they usually underperform in down markets. The flip side is that small-cap stocks often lead the way when markets are headed higher again.

Most small-cap investors can't wait for the market to turn. The S&P 500 has lost 16% since it peaked on Feb. 19. As for the small-cap benchmark Russell 2000? It has tumbled more than 25%.

This widespread pain among small caps might give investors pause about digging in. So we decided to suss out which stocks are holding up best, perhaps generating gains, and are set up for continued outperformance once businesses and markets get back to something resembling normal conditions.

Sure enough, even today, there's no shortage of great ideas when it comes to small-cap stocks.

To find the best candidates, we limited ourselves to companies with market capitalizations of between $1 billion and $2 billion. The stocks also had to outperform the S&P 500 since the bear market kicked off almost three months ago.

We further whittled the list down to stocks with an average broker recommendation of Buy or better. S&P Capital IQ surveys analysts' stock ratings and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.0 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call. Lastly, we dug into research and analysts' estimates on the top-scoring names.

From that pool, we landed on 11 of the best small-cap stocks that analysts love the most. Read on as we highlight each one.

Data and analysts’ ratings are of May 6 unless otherwise noted. Stocks are listed by average recommendation, from lowest to highest. Ratings and data are provided by S&P Capital IQ.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.