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3 small-cap stocks with competitive advantages

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URBN Cover Image

The market landscape is increasingly controlled by large firms that expand their reach by acquiring smaller competitors - a trend that the Trump administration’s looser regulatory policies will likely intensify. But a handful of under-the-radar players will persist by leaning into their niches.

Digging up these buried treasures isn’t easy, and that’s exactly why we created StockStory. Keeping that in mind, here are three hidden gems that could amplify your portfolio’s returns.

Urban Outfitters (URBN)

Market cap: $7.43 billion

Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ: URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.

Why Are We Positive on URBN?

  1. Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
  2. Locations open for at least a year are seeing increased demand as same-store sales have averaged 5.3% growth over the past two years
  3. Estimated revenue growth of 7.6% for the next 12 months implies better momentum than most peers

Urban Outfitters is trading at $86.11 per share, or 13.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Sanmina (SANM)

Market cap: $8.82 billion

Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

What Makes SANM Stand Out?

  1. Impressive 29.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
  2. Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
  3. Share repurchases over the last two years enabled its annual earnings per share growth of 41.3% to outpace its revenue gains

Sanmina’s stock price of $163.72 implies a valuation ratio of 12.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

EVERTEC (EVTC)

Market cap: $1.87 billion

Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE: EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.

Why Do We Like EVTC?

  1. Annual revenue growth of 13.1% over the last five years beat the sector average and underscores the unique value of its offerings
  2. Performance over the past two years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
  3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

At $31.25 per share, EVERTEC trades at 7.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

High-quality stocks for all market conditions

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

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