InvestorPlace While broader markets face continued pressure amid recession fears, small-cap stocks stand out as an undervalued segment of the stock market. The Russell 2000 index, the popular benchmark for small-cap stocks, is currently down 18% over the past year. Meanwhile, the S&P 500 index has declined less than 12% during the same period. Seasoned investors realize that a smaller company typically has more room for exponential growth in terms of both business operations and share price. In addition, many small-cap stocks offer rapid exposure to secular growth themes such as technology and health care. U.S. small-cap stocks tend to have a more domestic focus than large-caps. Thus, a significant portion of revenue comes from domestic operations. As a result, the health of the U.S. economy becomes particularly critical for their performance. In this context, worries about a potential recession have meant headwinds for many small-cap stocks. Now, analysts debate whether most of the bad news about our economy may already be factored into the share prices of many these small businesses. more…