In this article, we discuss the Best Small-Cap Value Stocks to Buy According to Bares Capital.
Brian Bares is the founder and Chief Investment Officer of Bares Capital Management, an Austin-based investment firm widely recognized for a disciplined, highly concentrated approach to small-cap and micro-cap investing. Since founding the firm in 2000, Bares has distinguished himself by moving away from traditional quantitative screening in favor of deep, qualitative fundamental research. The investment strategy of Bares is rooted in the belief that true value is found in the qualitative moats of a business, factors that standard financial ratios like P/E or P/B often fail to capture.
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His process prioritizes concentration. Bares typically runs portfolios of only 8 to 12 stocks. He believes that concentrating capital in a handful of extraordinary businesses allows for a depth of knowledge that mitigates risk more effectively than broad diversification. Bares has built his firm to attract long-term institutional allocators, such as non-profit endowments and foundations, who can withstand short-term volatility in exchange for long-term compounding. Unlike many managers who rely on secondary reports, Bares and his team emphasize boots on the ground research. This includes extensive site visits, rental car trips to small-town headquarters, and direct, probing interviews with management teams.
Our Methodology
For this article, we selected stocks by combing through the 13F portfolio of Bares Capital Management at the end of the third quarter of 2025. It is important to note that with climbing valuations, inflation, and years of market growth, the definition of small cap has become more fluid. The selected firms are also popular among hedge funds. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2025 database of 1041 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Best Small-Cap Value Stocks to Buy According to Bares Capital
10. The Middleby Corporation (NASDAQ:MIDD)
Bares Capital Management’s Stake: $7 Million
The Middleby Corporation (NASDAQ:MIDD) is a long-term holding in the 13F portfolio of Bares Capital. The fund first disclosed a stake in the company back in the fourth quarter of 2010. This position comprised just a little over 21,000 shares. By early 2012, the fund had grown this to over 350,000 shares before selling the stake off completely. A new position in the stock was then opened in the third quarter of 2012. This comprised just under 400,000 shares. The fund held onto this stake, growing it slightly, till the end of 2014 before selling it off. Another position was opened in 2018 and closed in 2021. The latest position in the firm was disclosed in the second quarter of 2025. Filings for the third quarter of 2025 show that the fund owned over 54,000 shares in the firm, the same as in the previous quarter.
The Middleby Corporation (NASDAQ:MIDD) is attracting interest from elite investors ahead of a planned business separation scheduled for completion soon. The firm is splitting into two independent, publicly traded entities: one focused on Commercial Foodservice and the other on Food Processing. Hedge funds view this as a way to unlock value by eliminating the conglomerate discount. Earlier this year, Middleby completed the sale of a 51% stake in its Residential Kitchen business to 26North for approximately $565 million in cash. This divestiture effectively removed the most volatile segment from the portfolio. The proceeds are being used to fuel one of the most aggressive capital return programs in the industry.
9. Onto Innovation Inc. (NYSE:ONTO)
Bares Capital Management’s Stake: $10 Million
Onto Innovation Inc. (NYSE:ONTO) first appeared in the 13F portfolio of Bares Capital in the third quarter of 2021. Back then, this position comprised 152,000 shares. The fund added to this stake and grew it to more than 220,000 shares by the end of the third quarter of 2022. Thereafter, it started trimming the position. By the second quarter of 2024, this holding had been reduced to just 40,000 shares and was sold off completely by the next quarter. A new position in the stock was then opened in the third quarter of 2025. This consisted of over 75,000 shares. Onto engages in the design, development, manufacture, and support of process control tools that perform macro-defect inspection and metrology in the United States, Taiwan, South Korea, Japan, China, Southeast Asia, Asia, and Europe.
Onto Innovation Inc. (NYSE:ONTO) is viewed by top investors as a hidden gatekeeper of the high-end AI chip market. While chipmakers like NVIDIA capture the headlines, smart money managers are focused on the specialized inspection tools required to build the complex packaging used in AI data centers. One example of this is the explosive demand for the new Dragonfly G5 inspection platform of Onto. The G5 is uniquely qualified for 2.5D advanced AI packaging, a critical step in manufacturing high-performance AI chips. Earlier this month, management raised their outlook, stating they expect Dragonfly platform demand to grow more than 50% in 2026 compared to 2025.
8. Veeva Systems Inc. (NYSE:VEEV)
Bares Capital Management’s Stake: $22 Million
Veeva Systems Inc. (NYSE:VEEV) first appeared in the 13F portfolio of Bares Capital in the first quarter of 2024. Back then, this position comprised 108,000 shares. The fund steadily added to this stake and by the fourth quarter of 2024, it owned over 130,000 shares in the firm. Thereafter, it started trimming the position. Filings for the third quarter of 2025 show that the fund owned a little over 73,000 shares in the firm, down more than 21% compared to filings for the second quarter of 2025. Veeva provides cloud-based software for the life sciences industry in North America, Europe, the Asia Pacific, the Middle East, Africa, and Latin America. The company offers Veeva Commercial Cloud comprising Veeva Vault CRM Suite for pharmaceutical and biotechnology companies; Veeva Medical that provides source of medical content across multiple channels and geographies.
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Veeva Systems Inc. (NYSE:VEEV) is turning heads on Wall Street as it pivots to agentic AI. Unlike generic AI tools, Veeva is integrating industry-specific AI agents directly into the Vault platform. Veeva has already officially released AI Agents for Safety and Quality applications. Because these agents have secure, direct access to the most critical datasets in the industry, like clinical trials and regulatory filings, they provide a level of automation that general-purpose AI cannot match. Institutions view this as a way for Veeva to increase wallet share within existing top 20 biopharma clients without having to significantly increase sales overhead. The firm also recently announced the acquisition of Ostro, a leading brand engagement platform.
7. Globus Medical, Inc. (NYSE:GMED)
Bares Capital Management’s Stake: $30 Million
Globus Medical, Inc. (NYSE:GMED) is a relatively new addition to the 13F portfolio of Bares Capital. Filings for the third quarter of 2025 show that the fund owned over 520,000 shares in the company. Globus develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the United States and internationally. The company offers spine products comprising traditional fusion implants, such as pedicle screw and rod systems, plating systems, intervertebral spacers, and corpectomy devices. It also markets treatment options for motion preservation technologies consisting of dynamic stabilization, total disc replacement, and interspinous distraction devices.
Globus Medical, Inc. (NYSE:GMED) is transitioning from a merger integration story to a high-growth surgical powerhouse. After successfully digesting a massive merger with NuVasive, the firm is now demonstrating the scale and profitability that professional investors crave. For example, management has confirmed they are on track to realize the full $170 million in cost synergies by the end of 2025/early 2026. While the industry average for EBITDA margins sits around 24–26%, Globus is pushing toward 33% in 2026. This superior efficiency makes it a top-tier pick for funds focused on industrial and healthcare profitability. The firm is registering record performance in Enabling Technologies, led by the Excelsius robotic platform. Hospitals that purchase an Excelsius robot are essentially locked in to using Globus implants for years.
6. Medpace Holdings, Inc. (NASDAQ:MEDP)
Bares Capital Management’s Stake: $57 Million
Medpace Holdings, Inc. (NASDAQ:MEDP) is a relatively recent addition to the 13F portfolio of Bares Capital. The fund first disclosed a stake in the company back in the first quarter of 2025. This position comprised more than 37,000 shares. The fund added to this stake by over 300% in the next quarter, growing the holding to more than 157,000 shares. Filings for the third quarter of 2025 show that the fund owned 111,000 shares in the firm, down close to 30% compared to filings for the previous quarter. Medpace provides clinical research-based drug and medical device development services in North America, Europe, Asia, South America, Africa, and Australia. The company offers a suite of services supporting the clinical development process from Phase I to Phase IV in various therapeutic areas.
Medpace Holdings, Inc. (NASDAQ:MEDP) consistently operates with higher margins than its larger Contract Research Organization peers. In Q1 2026, the company reported a backlog conversion rate of 23.3%, an improvement that signals highly efficient project execution. While other CROs struggle with rising labor costs, Medpace has managed to grow revenue at a much faster rate than its headcount, over 26.5% revenue versus over 5.7% headcount, a productivity alpha that attracts hedge funds focused on operating leverage. The firm also has an attractive capital return program. In 2025, Medpace ramped up share repurchases to $912.9 million, up from just $174 million the previous year.
While we acknowledge the potential of MEDP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MEDP and that has 100x upside potential, check out our report about the cheapest AI stock.
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