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:
Dole (DOLE)
Market Cap: $1.38 billion
Known for its delicious pineapples and Hawaiian roots, Dole (NYSE: DOLE) is a global agricultural company specializing in fresh fruits and vegetables.
Why Is DOLE Risky?
- 2% annual revenue growth over the last three years was slower than its consumer staples peers
- Gross margin of 8.1% is an output of its commoditized products
- Poor expense management has led to an operating margin of 2.6% that is below the industry average
At $14.51 per share, Dole trades at 10.9x forward P/E. Check out our free in-depth research report to learn more about why DOLE doesn’t pass our bar.
Fortune Brands (FBIN)
Market Cap: $5.42 billion
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE: FBIN) makes plumbing, security, and outdoor living products.
Why Do We Pass on FBIN?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Efficiency has decreased over the last five years as its operating margin fell by 9.8 percentage points
- Earnings per share fell by 8.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Fortune Brands is trading at $45.18 per share, or 12.9x forward P/E. If you’re considering FBIN for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
Graham Corporation (GHM)
Market Cap: $944.8 million
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Is GHM a Top Pick?
- Backlog has averaged 27.8% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Earnings growth has massively outpaced its peers over the last one years as its EPS has compounded at 83.3% annually
- Free cash flow margin jumped by 15.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Graham Corporation’s stock price of $85.52 implies a valuation ratio of 43.5x 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 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
