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.
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. Keeping that in mind, here is one small-cap stock that could be the next 100 bagger and two that could be down big.
Two Small-Cap Stocks to Sell:
Photronics (PLAB)
Market Cap: $1.33 billion
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Is PLAB Not Exciting?
- Sales are projected to be flat over the next 12 months and imply weak demand
- Gross margin of 36.2% reflects its high production costs
- Low free cash flow margin of 13% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $22.38 per share, Photronics trades at 12x forward P/E. Check out our free in-depth research report to learn more about why PLAB doesn’t pass our bar.
Graphic Packaging Holding (GPK)
Market Cap: $5.03 billion
Founded in 1991, Graphic Packaging (NYSE: GPK) is a provider of paper-based packaging solutions for a wide range of products.
Why Do We Avoid GPK?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Earnings per share have contracted by 12.8% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Graphic Packaging Holding’s stock price of $17.05 implies a valuation ratio of 8.3x forward P/E. If you’re considering GPK for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
UMB Financial (UMBF)
Market Cap: $8.07 billion
With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.
Why Will UMBF Outperform?
- Market share has increased this cycle as its 20.1% annual net interest income growth over the last five years was exceptional
- Anticipated efficiency ratio improvement of -5.4 percentage points over the next year signals it will gain leverage on its fixed costs and become more productive
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 16.3% annually
UMB Financial is trading at $106.91 per share, or 1.1x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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-small-cap company Exlservice (+354% 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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