Prospects for interest rate cuts are fueling speculations about which small-cap stocks will be winners when they hit. Because smaller companies don’t have the same financial access as larger stocks, they are forced to borrow money at higher cost, which impacts their ability to grow. More often than not, they will hunker down instead of taking on new, expensive debt.

Although it is difficult to predict how these companies with respond to rate cuts but could unleash a torrent of growth. Particularly with undiscovered small-cap stocks that have yet to strike a chord with investors, this could be the moment these unheralded stocks return to the forefront.

Here are three small-cap stocks that could soar to the top of the market. They posses strong tailwinds that an improved economy will reveal as hidden treasures hiding in plain sight.

Undiscovered Small-Cap Stocks: Corbus Pharmaceuticals Holdings (CRBP)

Oncology biotech Corbus Pharmaceuticals Holdings (NASDAQ:CRBP) is up more than 600% in 2024 but is likely not done yet. Its antibody-drug conjugate (ADC) CRB-701 is tackling an area of great interest to the medical community: being able to block the destructive signals sent to cancer cells. Corbus’ therapy is showing great early response in clinical trials.

What had the market excited about the biotech’s treatment is that ADCs are at the center of a swirl of acquisitions by larger pharmaceuticals. Bristol-Myers Squibb (NYSE:BMY), AbbVie (NYSE:ABBV) and Johnson & Johnson (NYSE:JNJ) have all bought companies in the space of a few months targeting this particular issue.

While Corbus Pharmaceuticals hasn’t received any offers it could eventually receive one of CRB-701 continues reporting positive developments.

But that is also why investors need to use discretion here. The drugs those pharmas acquired were further along in trials or received Food & Drug Administration approval. Corbus could still pull back as a result. But so far the drug shows promise and could light a fire if successful.

Land’s End (LE)

Although Land’s End (NYSE:LE) might not quite be undiscovered, more people are probably more familiar with its apparel than its stock. Because the company is in turnaround mode, it is flying under the radar of many investors.

On the surface, Land’s End looks troubled. Sales were down 8% in the first quarter and the apparel stock reported losses of 20-cents per share. Yet its performance was much better than Wall Street predicted. The decline in revenue was almost wholly due to a contract with Delta Air Lines (NYSE:DAL) not renewing. But that was already anticipated, so excluding the Delta contract, Land’s End sales actually were up 1% year-over-year.

This is when you want to buy a turnaround stock. Not on its way down and not when it’s already established itself again and the market has caught onto its recovery. While the retailer is up 39% in 2024, there is much more room to grow. An interest rate cut will signal inflation is coming under control and could renew consumer strength.

Innovative Industrial Properties (IIPR)

Cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE:IIPR) is poised to storm higher. The movement towards legalization in the U.S. is gaining speed. It will allow more marijuana companies to proliferate, which will expand Innovative Industrial’s portfolio.

There are only a handful of REITs targeting the cannabis market and IIP is the leading player. It currently owns 108 properties across 19 states, equal to some 8.9 million rentable square feet. It offers them all under long-term leases to state-licensed marijuana growers for an average period of 14.8 years. Some 95% of its portfolio is leased under a triple-net lease arrangement, which means the tenants are responsible for taxes, maintenance, and insurance.

Like all REITs, Innovative Industrial pays out most of its profits as dividends. The payout currently yields an eye-catching 6.6% annually. It just raised the dividend 4.4% to $1.90 per share, a practice it has consistently maintained since going public in 2016. This medical marijuana REIT is one to buy for the long haul.

On the date of publication, Rich Duprey held a LONG position in ABBV stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.