7 Undervalued Small-Cap Stocks to Buy Now In this down-to-sideways market, it is important to look for undervalued stocks, both as a hedge against the downside and for opportunity on the upside. And since the small-capitalization asset class has performed so badly compared to the large-caps, investors should look for undervalued small-cap stocks now to get outsized returns. On a one-year time frame, according to Morningstar.com , and using the core characteristic sector , which is a blend of growth and value, the U. S. large-cap sector is down 10.20%, while the U.S. small-cap sector is down 18.77%; over three years, the large-cap sector is up 9.87% per year, while the small-cap sector is up 2.3% per year; and over five years, the large-cap sector has climbed 8.48% per year, while the small-cap sector has gone up only 3.03% per year. 7 Best Reddit Stocks to Buy Now The following stocks are my top picks among undervalued small-cap stocks to consider buying. SSTK Shutterstock $60.09 AVNS Avanos Medical $27.78 PRLB Proto Labs $48.