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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could be the next big thing and two best left ignored.
Two Small-Cap Stocks to Sell:
G-III (GIII)
Market Cap: $1.16 billion
Founded as a small leather goods business, G-III (NASDAQ: GIII) is a fashion and apparel conglomerate with a diverse portfolio of brands.
Why Do We Think GIII Will Underperform?
- Annual revenue declines of 1.2% over the last two years indicate problems with its market positioning
- Sales are projected to tank by 3.9% over the next 12 months as its demand continues evaporating
- Low returns on capital reflect management’s struggle to allocate funds effectively
G-III is trading at $27.50 per share, or 12.1x forward P/E. Dive into our free research report to see why there are better opportunities than GIII.
Korn Ferry (KFY)
Market Cap: $3.40 billion
With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.
Why Does KFY Fall Short?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.3% annually over the last two years
- Projected sales growth of 2.7% for the next 12 months suggests sluggish demand
- Eroding returns on capital suggest its historical profit centers are aging
At $64.98 per share, Korn Ferry trades at 12.4x forward P/E. To fully understand why you should be careful with KFY, check out our full research report (it’s free for active Edge members).
One Small-Cap Stock to Watch:
Origin Bancorp (OBK)
Market Cap: $1.09 billion
Founded in 1912 during the early boom days of Louisiana banking, Origin Bancorp (NYSE: OBK) is a financial holding company that provides personalized banking services to businesses, municipalities, and individuals across Texas, Louisiana, and Mississippi.
Why Are We Fans of OBK?
- Impressive 11.8% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Operating profits are forecasted to increase over the next year as it scales and becomes more productive
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 19.7% annually, topping its revenue gains
Origin Bancorp’s stock price of $35.14 implies a valuation ratio of 0.9x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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