If you are looking for some small-cap gems, then this diverse group chosen by three Motley Fool contributors should provide a great starting point. Axon Enterprise (NASDAQ:AAXN) is a company with a "stunning" past that's transitioning into vital new areas. KushCo Holdings (NASDAQOTH:KSHB) recently changed its name to highlight that it, too, is reaching new markets -- notably ones involving marijuana. And Tanger Factory Outlet Centers (NYSE:SKT) is a discount-mall owner that is only a small cap today because investors have a dour view of its future, even though the fears are likely overblown. Let's see just how attractive these small-cap opportunities are.

Get on board with Axon before its newest rollout

Brian Stoffel (Axon Enterprise): No small-cap stock makes up more of my portfolio than Axon, so it only makes sense I'd recommend the company. Many might know Axon better by its former name: Taser International. But while the company still makes its well-known stun guns -- and has a corner on that market -- the name change signifies something important: a pivot toward body cameras.

Two people looking at a computer screen with a stock chart on it.

Image source: Getty Images.

After acquiring its main rival, Vievu, Axon also has a virtual monopoly in the body-camera market for law enforcement. But even so, the real story is Evidence.com, the company's ssoftware-as-a-service (SaaS) site. It allows all that camera footage to be downloaded, stored, and -- most important of all -- analyzed using artificial intelligence. Once police departments start using Evidence.com, the incentives are very high to stay with it: Switching providers would bring enormous costs -- not just financially, but in the time required to retrain employees, and the legal costs from losing crucial evidence.

And investors who buy in now also get the chance to benefit from Axon's rollout in late 2019 of Axon Records. This SaaS add-on promises to use video footage to help auto-fill paperwork and cut down on desk time for police officers. That's time they can use to get out and connect with the public -- one of the most important things for improving community relations. 

Bigger than bottles

Keith Speights (KushCo Holdings): Until September 2018, KushCo Holdings was known as KushCo Bottles. The company's previous name made sense with KushCo's rise as the top supplier of packaging solutions -- including pop-top bottles -- to the cannabis industry. But KushCo is bigger than bottles.

Thanks to acquisitions last year, KushCo now operates a subsidiary that supplies hydrocarbons and solvents to the cannabis industry. These products are crucial in extracting cannabinoids from cannabis plants. The company also now provides branding, marketing, and e-commerce solutions to the cannabis industry. KushCo's core business, though, continues to focus on packaging solutions. 

Ten states now allow legal sales of recreational marijuana, while 33 states have legalized medical marijuana. Most of these markets are still in their infancy, which gives KushCo lots of opportunities for its packaging solutions and other ancillary businesses.

Another great opportunity for KushCo is the recent U.S. legalization of hemp, which by definition is cannabis that contains low levels of THC. Cannabis market research company Brightfield Group projects that the U.S. market for hemp-based cannabidiol (CBD) could reach $22 billion by 2022.

There are several ways that KushCo should be able to profit from the U.S. hemp market. The company's packaging could be used for hemp-based CBD oils. Its vaping cartridges should enjoy higher demand from increased vaping of hemp-based CBD. And KushCo's hydrocarbon and solvent sales should grow with increased extraction of CBD from hemp.

All of these reasons make KushCo Holdings one of my top marijuana stocks to buy in 2019. And I think they make it a top small-cap stock to buy in February.

Working through a tough spot

Reuben Gregg Brewer (Tanger Factory Outlet Centers): The so-called retail apocalypse is a headwind for Tanger, which owns 44 outlet shopping centers. Occupancy and rental rates have taken a hit, and the pain isn't over yet. This real estate investment trust (REIT), with a roughly $2.2 billion market cap, basically expects 2019 to be another transition year.   

But the hefty 6% yield is worth a very close look despite the headwinds. The REIT has a rock-solid balance sheet. Investment grade Tanger covers interest expenses by over five times, and total debt makes up just 50% of total assets. Occupancy is still a very strong 96%. And, most important, it is dealing with the headwinds, including offering short-term rent concessions to keep occupancy high and bringing in on-trend tenants. The problem is that transitions like this take time, and investors don't like to wait. Thus the shares have fallen 45% from their early 2016 highs.   

SKT Chart

SKT data by YCharts

This presents an opportunity for long-term investors. Tanger is working with a very strong financial foundation and can ride out this tough spot. In fact, the dividend only eats up around two-thirds of the REIT's funds from operations (a key performance metric for REITs), which is a very low payout ratio. That leaves ample cash for other purposes, including investing in its properties. Moreover, outlet centers are different from enclosed malls in that they don't have anchor tenants and are among the least expensive store options for retailers.   

Tanger is being treated as if it's a completely broken business, but the numbers just don't back that up. Pick up the hefty yield before the REIT gets back on its feet and investors bid the shares higher.

Check out the latest Axon and Tanger earnings call transcripts.