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.
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 big thing and two that could be down big.
Two Small-Cap Stocks to Sell:
Campbell's (CPB)
Market Cap: $9.88 billion
With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ: CPB) is a packaged food company with an illustrious portfolio of brands.
Why Does CPB Give Us Pause?
- Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 3.6 percentage points
Campbell’s stock price of $33.18 implies a valuation ratio of 10.9x forward P/E. Check out our free in-depth research report to learn more about why CPB doesn’t pass our bar.
Perdoceo Education (PRDO)
Market Cap: $2.17 billion
Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ: PRDO) is an educational services company that specializes in postsecondary education.
Why Are We Wary of PRDO?
- Lackluster 2.9% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Waning returns on capital imply its previous profit engines are losing steam
Perdoceo Education is trading at $33 per share, or 21.3x forward EV-to-EBITDA. To fully understand why you should be careful with PRDO, check out our full research report (it’s free).
One Small-Cap Stock to Watch:
OFG Bancorp (OFG)
Market Cap: $1.99 billion
Originally founded in 1964 as a federal savings and loan institution, OFG Bancorp (NYSE: OFG) provides banking and financial services including commercial and consumer lending, wealth management, insurance, and trust services primarily in Puerto Rico and the U.S. Virgin Islands.
Why Are We Fans of OFG?
- Non-interest operating profits and efficiency rose over the last four years as it benefited from some fixed cost leverage
- Share repurchases over the last two years enabled its annual earnings per share growth of 6.3% to outpace its revenue gains
- Balance sheet strength has increased this cycle as its 11.8% annual tangible book value per share growth over the last five years was exceptional
At $44.81 per share, OFG Bancorp trades at 1.4x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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 Kadant (+351% 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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