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.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here is one small-cap stock that could be the next big thing and two best left ignored.
Two Small-Cap Stocks to Sell:
AMC Networks (AMCX)
Market Cap: $430.1 million
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.
Why Do We Think AMCX Will Underperform?
- Products and services have few die-hard fans as sales have declined by 3.7% annually over the last five years
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1 percentage points over the next year
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $9.79 per share, AMC Networks trades at 8.2x forward P/E. Check out our free in-depth research report to learn more about why AMCX doesn’t pass our bar.
Planet Fitness (PLNT)
Market Cap: $4.29 billion
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE: PLNT) is a gym franchise that caters to casual fitness users by providing a friendly and inclusive atmosphere.
Why Are We Out on PLNT?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 6.6 percentage points over the next year
- Stagnant returns on capital show management has failed to improve the company’s business quality
Planet Fitness is trading at $53.83 per share, or 16.7x forward P/E. Read our free research report to see why you should think twice about including PLNT in your portfolio.
One Small-Cap Stock to Watch:
Gulfport Energy (GPOR)
Market Cap: $2.84 billion
With drilling operations focused on the Utica Shale in eastern Ohio and the SCOOP play in central Oklahoma, Gulfport Energy (NYSE: GPOR) drills for and produces natural gas from underground shale formations.
Why Are We Fans of GPOR?
- Impressive 9.2% annual revenue growth over the last ten years indicates it’s winning market share this cycle
- Highly-profitable operating model results in strong unit economics and a stellar gross margin of 69.6%
- GPOR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Gulfport Energy’s stock price of $157.86 implies a valuation ratio of 6.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% 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.
