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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could be the next big thing and two best left ignored.
Two Small-Cap Stocks to Sell:
Himax (HIMX)
Market Cap: $2.19 billion
Taiwan-based Himax Technologies (NASDAQ: HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Why Should You Sell HIMX?
- Annual sales declines of 4.2% for the past five years show its products and services struggled to connect with the market during this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 15.1 percentage points
- 8× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Himax is trading at $12.77 per share, or 21.6x forward P/E. Dive into our free research report to see why there are better opportunities than HIMX.
EnerSys (ENS)
Market Cap: $6.74 billion
Supplying batteries that power equipment as big as mining rigs, EnerSys (NYSE: ENS) manufactures various kinds of batteries for a range of industries.
Why Are We Wary of ENS?
- Flat unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Projected sales growth of 4.1% for the next 12 months suggests sluggish demand
- High input costs result in an inferior gross margin of 26.6% that must be offset through higher volumes
At $188.11 per share, EnerSys trades at 14.7x forward P/E. Read our free research report to see why you should think twice about including ENS in your portfolio.
One Small-Cap Stock to Buy:
StoneX (SNEX)
Market Cap: $9.23 billion
Originally known as INTL FCStone until its 2020 rebranding, StoneX Group (NASDAQ: SNEX) provides a global financial services network connecting companies, traders, and investors to markets through clearing, execution, and advisory services.
Why Will SNEX Beat the Market?
- Impressive 44.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 29.6% annually
- Impressive 16.9% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
StoneX’s stock price of $77.49 implies a valuation ratio of 2.9x forward P/B. Is now a good 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
