In this article, we will look at the 10 Overlooked Small Cap Stocks to Buy Now.
On January 2, Royce Investment released its Small-Cap Recap Q4 2025 report, highlighting that the last quarter of 2025 saw the Russell 2000 and Russell Microcap Indexes each in positive territory. The report noted that the performance further solidified the small-cap leadership. During Q4, the Russell 2000 moved up 2.2%, and the Russell Microcap index moved up 6.3%, marking the 12th largest quarterly spread between the two indexes.
On January 23, Liz Ann, Chief Investment Strategist at Charles Schwab, appeared on a Schwab Network interview to discuss the driving factors and sustainability of the small-cap leadership. Ann noted that the broadening of the market towards small and mid-cap stocks began due to the Federal Reserve’s easing cycle. She highlighted that the performance of the small-cap continues despite the silence from the Federal Reserve and the lower chances of a rate cut anytime soon. Ann noted that currently, the small-cap outperformance is driven by increasing demand and resilience in the manufacturing and industrial sectors, which is resulting in international broadening out towards lower market cap companies.
With that, let’s take a look at the 10 Overlooked Small Cap Stocks to Buy Now.
Our Methodology
To curate the list of Overlooked Small Cap Stocks to Buy Now, we sifted through various online rankings by reputable financial media. From these sources, we aggregated a list of small-cap stocks (market cap between $300 million and $2 billion) and positive analysts’ upside potential. Next, we cross-checked the upside from CNN and the market cap from WSJ. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s Q3 2025 database. Please note that the data was recorded on February 6, 2026.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Overlooked Small Cap Stocks to Buy Now
10. Utz Brands, Inc. (NYSE:UTZ)
Market Cap: $1.57 billion
Upside: 32.06%
Number of Hedge Fund Holders: 16
Utz Brands, Inc. (NYSE:UTZ) is one of the Overlooked Small Cap Stocks to Buy Now. Utz Brands, Inc. (NYSE:UTZ) is set to release its fiscal Q4 2025 results on February 12, 2026. Wall Street expects the company to post quarterly revenue around $344.65 million along with a GAAP EPS of $0.27. Wall Street is bullish on the stock ahead of the earnings with 73% of the 11 analysts covering the stock maintaining a Buy rating.
Recently, on January 27, Scott Marks CFA from Jefferies reiterated a Buy rating on Utz Brands, Inc. (NYSE:UTZ) with a $15 price target. Earlier on January 14, DA Davidson also reiterated a Buy rating on the stock with a $15 price target.
Analysts at DA Davidson maintained a positive rating on the stock despite modest preliminary Q4 2025 results announced on January 12. Management noted that they expect Q4 2025 net sales to be in the range of $342 million to $343 million, reflecting only 0.3% and 0.6% increase year-over-year. Adjusted EBITDA for the quarter is expected to be in the range of $62 million to $64 million, representing 17% to 21% increase year-over-year. DA Davidson noted that although the expectations are modest, the firm considers the results to be strong due to a tough consumer packaged goods market environment.
Utz Brands, Inc. (NYSE:UTZ) manufactures and sells a diverse range of snacks under brands like Utz, On The Border, Zapp’s, and Boulder Canyon. Their portfolio includes potato chips, pretzels, cheese snacks, tortilla chips, salsas, and bold-flavored kettle chips.
9. Standard Motor Products, Inc. (NYSE:SMP)
Market Cap: $970.82 million
Upside: 6.50%
Number of Hedge Fund Holders: 17
Standard Motor Products, Inc. (NYSE:SMP) is one of the Overlooked Small Cap Stocks to Buy Now. On February 2, Standard Motor Products, Inc. (NYSE:SMP) announced that its Board of Directors approved an increase in quarterly dividend from 31 cents to 33 cents per share. The increase represents 6.5% rise from the previous quarterly dividend and will be payable on March 2, 2026.
That said, Standard Motor Products, Inc. (NYSE:SMP) is expected to release its fiscal Q4 2025 results on February 20, 2026. Wall Street expects the company to post a quarterly revenue of around $385.91 million, along with a normalized EPS of $0.49.
In other news, Standard Motor Products, Inc. (NYSE:SMP) on January 13 announced growing its Evaporative Emissions (EVAP) product line with more than 1,150 parts. Management noted that these parts help control gasoline vapors from escaping into the air, preventing pollution and also fixing issues that trigger a vehicle’s check engine light. Management also highlighted that this is a strategic step that aligns with stricter US government policies against emissions, which is boosting demand for EVAP parts.
Standard Motor Products, Inc. (NYSE:SMP) manufactures and distributes replacement parts for the automotive aftermarket. The company focuses on engine management, electrical/safety systems, wire sets, AC components, and thermal products through its Vehicle Control and Temperature Control segments.
