3 Small-Cap Stocks to Buy After Second-Quarter 2020 Earnings

COVID-19 has sent the world into a tailspin, and rapid changes have been necessary for many businesses trying to manage during this time. As some operations that rely on in-person interactions are rendered redundant, the digital world is more important than ever. But as the economy begins to emerge from the pandemic-induced recession, the groundwork has been laid for a number of new small businesses to grow.

Investing in small-cap stocks brings some extra risk. Share prices can be volatile in the extreme, and there's a higher chance that larger peers will steamroll these small companies. Investors should plan on holding a number of these emerging stocks (I recommend at least 15 or more) and keeping positions in them modest (I usually start by buying 0.5% to 1% or less of my total portfolio value).

After the release of second-quarter 2020 results, three small-caps that remain on my radar are Appian (NASDAQ: APPN), Ontrak (NASDAQ: OTRK), and Digital Media Solutions (NYSE: DMS).

Source Fool.com