Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
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:
Utz (UTZ)
Market Cap: $1.25 billion
Tracing its roots back to 1921 when Bill and Salie Utz began making potato chips in their kitchen, Utz Brands (NYSE: UTZ) offers salty snacks such as potato chips, tortilla chips, pretzels, cheese snacks, and ready-to-eat popcorn, among others.
Why Do We Steer Clear of UTZ?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Subscale operations are evident in its revenue base of $1.45 billion, meaning it has fewer distribution channels than its larger rivals
- ROIC of 0.2% reflects management’s challenges in identifying attractive investment opportunities
Utz’s stock price of $14.08 implies a valuation ratio of 17.6x forward P/E. To fully understand why you should be careful with UTZ, check out our full research report (it’s free).
JELD-WEN (JELD)
Market Cap: $94.77 million
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE: JELD) manufactures doors, windows, and other related building products.
Why Are We Bearish on JELD?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
JELD-WEN is trading at $1.12 per share, or 10.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than JELD.
One Small-Cap Stock to Buy:
Federated Hermes (FHI)
Market Cap: $4.15 billion
With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.
Why Do We Love FHI?
- Share repurchases over the last two years enabled its annual earnings per share growth of 21.1% to outpace its revenue gains
- ROE punches in at 25.7%, illustrating management’s expertise in identifying profitable investments
At $57.21 per share, Federated Hermes trades at 3.5x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
