Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here is one small-cap stock that could be the next 100 bagger and two best left ignored.
Two Small-Cap Stocks to Sell:
Lindsay (LNN)
Market Cap: $1.24 billion
A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE: LNN) provides a variety of proprietary water management and road infrastructure products and services.
Why Are We Hesitant About LNN?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Sales are projected to be flat over the next 12 months and imply weak demand
- Eroding returns on capital suggest its historical profit centers are aging
Lindsay is trading at $118.73 per share, or 18.1x forward P/E. Read our free research report to see why you should think twice about including LNN in your portfolio.
Hilltop Holdings (HTH)
Market Cap: $2.11 billion
Transformed from a residential communities business to a financial services powerhouse in 2007, Hilltop Holdings (NYSE: HTH) is a Texas-based financial holding company that provides banking, broker-dealer, and mortgage origination services.
Why Do We Pass on HTH?
- Flat net interest income over the last five years suggest it must find different ways to grow during this cycle
- Projected 31.7 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
At $35.48 per share, Hilltop Holdings trades at 0.9x forward P/B. If you’re considering HTH for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
Oscar Health (OSCR)
Market Cap: $3.63 billion
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE: OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Why Will OSCR Beat the Market?
- Impressive 41.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Adjusted operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Free cash flow margin increased by 16.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Oscar Health’s stock price of $12.28 implies a valuation ratio of 32.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
