These are the top three small-cap stocks in the UK to purchase right now

William Tamworth of the Artemis UK Smaller Companies Fund and Future Leaders trust has chosen three UK small-cap stocks that are industry leaders

Purchasing UK small-cap stocks does not always expose investors to companies that are having difficulties competing with bigger companies. Conversely, we actively look for smaller businesses that control specialized markets. Despite not being FTSE 100 behemoths, they are leaders in their fields and have the resourcesscale, data, and strategic positioningto succeed. These companies are abundant in the UK's small-cap sector. Leading a niche market offers a number of important benefits. It can improve pricing power, which is particularly useful in the current inflationary climate and raises the possibility of profits. The structure of the industry in which the business operates and competitive barriers are equally important to us. In the absence of entry barriers, rivals can quickly reduce profit margins even as demand increases. These three smaller businesses, in our opinion, have an advantage.

Small-cap stocks in the UK to add to your portfolio.

The MoneySuperMarket and Money Saving Expert brands are owned by MONY Group (LSE: MONY), one of the top price comparison sites in the UK. Offering a wide range of products, such as current accounts, broadband, energy, loans, and travel insurance, it may not be the biggest in every category, but it has the broadest offering, which is significant because MONY regularly engages with its clients. SuperSaveClub, its rewards program, lessens MONY's dependency on Google and television advertising while also assisting in turning a one-time transaction into a recurring revenue stream. With 2.1 million members and 16% of group revenues in 2025, it is rapidly expanding.

The shares have dropped to appealing levels due to worries about the risks associated with artificial intelligence. Additionally, MONY's competitive advantages will be strengthened by a number of barriers to entry, such as regulations, connections to numerous insurers, and strong brand recognition. The fact that Amazon tried to get into this market in 2022 but left 15 months later says something.

The UK small-cap stock Moonpig (LSE: MOON) holds a 70 percent market share in the nation's online greeting card industry. Data is what that means. Moonpig uses its system, which contains over 100 million customer reminders, to turn one-time purchases into recurring business. More than a million people have signed up for Moonpig Plus, its subscription service, and they are using it to add gifts to their purchases in addition to making more frequent card purchases. The company floated at an exorbitant price. After five years, the share price has dropped by roughly half, making it seem like a wise investment.

Victorian Plumbing (LSE: VIC) is a market leader as well. The company's strong market position has been strengthened by the acquisition of its (near) namesake Victoria Plum, and it can now invest in its brand much more successfully. It could double its sales within its current infrastructure thanks to its recent relocation to a new warehouse, which should allow it to grow. Similar to Moonpig, Victorian Plumbing was overpriced at its IPO and benefited from Covid. Concerns regarding UK consumer spending and its choice to invest in the homewares market have recently hurt the shares. These are transient worries. Inflation is rising, interest rate cuts are being postponed, and already fragile consumer confidence has been further damaged by the Iranian conflict. However, household debt-to-income levels are at a generational low and consumer savings rates are high. This, in our opinion, is a solid foundation for when consumer confidence does rebound.