In this article, we will take a look at some of the most oversold small-cap stocks that currently offer attractive upside to investors. On April 18, stocks in the U.S. market soared to their all-time highs as the S&P 500 broke through the milestone of 7,100 for the first time ever, and the Nasdaq Composite achieved its 13-day win streak since 1992. The stock’s upward movement followed the announcement by Iran that the Strait of Hormuz would stay open throughout the ceasefire period between Israel and Lebanon, which led to a fall in oil prices.
The small cap stocks performed exceptionally well, with the Russell 2000 hitting an all-time high and rising by more than 2% for the day. Energy stocks plummeted after West Texas Intermediate oil dropped by nearly 12% to $83.85 per barrel, whereas travel and cruise companies recovered impressively due to reduced political uncertainty. The Dow Jones Industrial Average rose by 868.71 points to close at 49,447.43, marking a gain of 1.79%.
From an investment perspective, the rapid shift in focus from tensions in the Middle East to risk-taking is a sign that identifying oversold small cap stocks can be crucial until sentiment remains unchanged. As the Russell 2000 index has bounced back by 14% since its lowest in March and hit all-time highs, finding the best small-cap stocks can reveal significant upside potential for investors. With that background, let’s explore our 10 Oversold Small Cap Stocks to Buy Now.
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Our Methodology
To identify relevant stocks for this article, we conducted a sector-agnostic screening of U.S.-listed companies with market capitalizations between $200 million and $2 billion. We narrowed down our search to include stocks with an RSI indicator below 30. Also, we only shortlisted stocks with at least 15% upside potential according to consensus, as of April 24 closing. Finally, we selected 10 stocks with the highest upside and ranked them in ascending order.
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).
10. Ennis Inc. (NYSE:EBF)
Ennis Inc. (NYSE:EBF) is one of the 10 oversold small cap stocks to buy now.
The company’s recent results announcement offers a lot of encouragement. On April 20, Ennis Inc. (NYSE:EBF) reported its fourth quarter earnings of 35c per share, matching the prior year results. Quarterly revenue reached $96.4 million, compared to $92.7 million for the same period last year. Chairman, Chief Executive, and President Keith Walters highlighted that the results for the quarter met management’s expectations.
He noted that this year’s acquisitions contributed around $8.8 million to the quarter’s topline figures, which were partially offset by reduced organic volume. The gross margin remained healthy at 29.2%, against 29.5% recorded in the same quarter last year. In terms of operations, EBITDA for the quarter was recorded at $16.3 million, which translates into 17.8% in margins. This indicates consistency relative to the $16.5 million that was recorded in the same quarter last year.
Walters also highlighted that the company completed the ERP integration of Northeastern Envelope Company, its biggest acquisition during the year. The integration will help manage costs and pricing and maintain consistent margins. Acquisitions also delivered 5 cents of positive impact on diluted EPS and 14 cents on full-year EPS.
Ennis Inc. (NYSE:EBF) is a manufacturer and seller of business forms and various printed products. Under an umbrella of brands, it offers a vast range of products, which include envelopes, laser-cut sheets, tags, snap sets, jumbo rolls, and more. It also provides custom products like labels, stock tags, and stock pressure seal documents, to name a few.
9. IRADIMED Corp. (NASDAQ:IRMD)
IRADIMED Corp. (NASDAQ:IRMD) is one of the 10 oversold small cap stocks to buy now.
As of the April 24 closing, the stock carries a strongly bullish consensus sentiment. It received Buy ratings from all 3 analysts who covered the stock. Based on a 1-year median target price of $118.67, it yields an upside potential of almost 34%.
Back on April 2, Freedom Broker initiated its coverage of IRADIMED Corp. (NASDAQ:IRMD), with a Buy rating. The firm projected a price target of $116, which results in an upside potential in excess of 30% at the current level.
The rating, along with underlying fundamentals, supports the bullish argument for IRADIMED Corp. (NASDAQ:IRMD). Freedom Broker reflected on this highly profitable and dividend-yielding company as apparently being the only one that provides a non-magnetic MRI compatible IV infusion pump, and a non-magnetic MRI compatible patient monitoring solution. These upgrades are attributed to several product-related cycles as well as the quick expansion of the company’s ferromagnetic detection product.
In addition, there is an undervalued international expansion potential, which further reinforces the positive investment recommendation. The company’s stock currently presents attractive upside potential with respect to the target price at its current level.
IRADIMED Corp. (NASDAQ:IRMD) is a producer and seller of intravenous infusion pump systems, patient vital signs monitoring systems, and related accessories that are compatible with magnetic resonance imaging (MRI). Its product portfolio includes MRidium 3870, 3860+ MRI Compatible IV Infusion Pump System, 3880 MRI compatible patient vital signs monitoring system, 3600 FMD1, and more.
8. Agios Pharmaceuticals Inc. (NASDAQ:AGIO)
Agios Pharmaceuticals Inc. (NASDAQ:AGIO) is one of the 10 oversold small cap stocks to buy now.
On April 21, BofA analyst Alec Stranahan reduced the price target on Agios Pharmaceuticals Inc. (NASDAQ:AGIO) to $41 from $44, while maintaining a Buy rating on the stock. Stranahan highlighted that Agios intends to seek accelerated approval and has already filed a proposal for a confirmatory trial with an updated primary endpoint.
Nevertheless, the analyst noted that topline results of the HIBISCUS study of Novo Nordisk’s etavopivat for sickle cell disease will pose a regulatory risk for Agios’ mitapivat. Despite such competitive risks, the stock is still amongst the best oversold small-cap names right now.
On April 20, H.C. Wainwright analyst Emily Bodnar reduced the price target on Agios Pharmaceuticals Inc. (NASDAQ:AGIO) from $65 to $50, while maintaining a Buy rating on the stock. She attributed this downward revision to Novo Nordisk’s HIBISCUS Phase 3 trial, noting that both primary endpoints were met, which is sure to result in success for sickle cell disease.
Novo’s etavopivat is taken once a day compared to Agios’ mitapivat taken twice a day. Given that Novo offers multiple medications for preventing hemorrhages in hemophilia A/B patients, the company expects to secure a large market share, according to the analyst. The HIBISCUS data is expected to reduce the commercialization potential of mitapivat.
Agios Pharmaceuticals Inc. (NASDAQ:AGIO) is engaged in discovering and creating therapeutics in the field of cellular metabolism in the United States. It offers a range of drugs for different illnesses. Its product offering includes PYRUKYND (mitapivat), AQVESME, tebapivat, AG-181, and AG-236.
7. Insteel Industries Inc. (NYSE:IIIN)
Insteel Industries Inc. (NYSE:IIIN) is one of the 10 oversold small cap stocks to buy now.
On April 16, Insteel Industries Inc. (NYSE:IIIN) reported earnings per share of $0.27 for the second quarter, down from $0.52 per share last year. The company also reported revenue figures of $172.7 million for the quarter, up from $160.7 million the prior year.
Chief Executive H.O. Woltz III noted that the cold weather impacted operations and geographies during the quarter. Construction slowed, limiting shipments. Projects expected in the second quarter were delayed to later this fiscal year. As indicated by the executive, this delay is temporary and not a decrease in demand on the part of the buyer.
In addition to that, there are other factors affecting the environment in terms of supply and costs, U.S. trading policies, and the Middle East situation. The company is happy with the current market position and the lack of competition from imports. There are concerns, however, about the competitiveness of U.S. hot-rolled steel compared with other markets in terms of pricing. Inflation is another cost pressure factor. Looking ahead, the company will concentrate on disciplined pricing, efficiency, and good client relations. These prospects support our optimism around the stock, which currently is one of the best oversold small-cap picks.
Insteel Industries Inc. (NYSE:IIIN) produces and sells steel wire reinforcing products for concrete construction applications. It offers pre-stressed concrete strand (PC strand) used to provide reinforcement for buildings, parking decks, and other concrete structures. The company also offers welded wire reinforcement (WWR), which makes a range of products like engineered structural mesh, concrete pipe reinforcement, precast manholes, water treatment facilities, and more.
6. Mama’s Creations Inc. (NASDAQ:MAMA)
Mama’s Creations Inc. (NASDAQ:MAMA) is one of the 10 oversold small cap stocks to buy now.
On April 16, DA Davidson increased the price target on Mama’s Creations Inc. (NASDAQ:MAMA) from $24 to $25, resulting in an adjusted upside of almost 73%. The firm also maintained a Buy rating on the stock based on its fourth-quarter performance.
DA Davidson noted that fourth-quarter performance was better than expected across major parameters, primarily driven by the incremental Costco multi-vendor mailer. The firm considers the stock its most attractive bet in the food industry due to various growth drivers over the coming years. With new stores and new items at current stores, there exists a chance that sales growth could be higher than the projected 12% and is expected to reach 20%.
Earlier on April 15, the company announced fourth-quarter revenue of $54 million, surpassing the expected $52.36 million. Adam Michaels, chairman & CEO, described fiscal 2026 as a pivotal year for the company. The company’s revenue surged by 39%, reaching $117.7 million, and adjusted EBITDA grew by 50%.
He highlighted that the acquisition and integration of Crown 1 Bay Shore changed the operating environment. According to Michaels, the powerful growth engine and the positive effect of the acquisitions conducted contribute to the company’s success.
Mama’s Creations Inc. (NASDAQ:MAMA) is engaged in the production and marketing of fresh deli-prepared foods. It has a vast range of food offerings which include meat loaf, pasta, chicken, beef, and turkey meatballs, olive mixes, and savory products. It also sells prepared foods, sandwiches, cold deli, foods-to-go sections, and more.
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