Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one small-cap stock that could be the next 100 bagger and two that may have trouble.
Two Small-Cap Stocks to Sell:
MGP Ingredients (MGPI)
Market Cap: $667.1 million
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ: MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Should You Dump MGPI?
- Annual revenue declines of 2.8% over the last three years indicate problems with its market positioning
- Projected sales decline of 19.8% over the next 12 months indicates demand will continue deteriorating
- Operating margin declined by 10 percentage points over the last year as its sales cratered
MGP Ingredients’s stock price of $31.36 implies a valuation ratio of 11.8x forward P/E. If you’re considering MGPI for your portfolio, see our FREE research report to learn more.
Amneal (AMRX)
Market Cap: $2.64 billion
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Why Are We Wary of AMRX?
- Free cash flow margin dropped by 12.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Low returns on capital reflect management’s struggle to allocate funds effectively
Amneal is trading at $8.30 per share, or 12x forward P/E. Read our free research report to see why you should think twice about including AMRX in your portfolio.
One Small-Cap Stock to Watch:
Primerica (PRI)
Market Cap: $8.97 billion
With a sales force of over 140,000 licensed representatives operating on an independent contractor model, Primerica (NYSE: PRI) provides term life insurance, investment products, and other financial services to middle-income households in the United States and Canada.
Why Is PRI on Our Radar?
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 19.2% exceeded its revenue gains over the last five years
- Impressive 12.6% annual book value per share growth over the last five years indicates it’s building equity value this cycle
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $273.07 per share, Primerica trades at 3.7x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. 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
