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 amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
SAIC (SAIC)
Market Cap: $4.71 billion
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ: SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
Why Do We Pass on SAIC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.1% annually over the last two years
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
SAIC’s stock price of $104.38 implies a valuation ratio of 12.4x forward P/E. Check out our free in-depth research report to learn more about why SAIC doesn’t pass our bar.
Darling Ingredients (DAR)
Market Cap: $6.71 billion
Turning what others consider waste into valuable resources, Darling Ingredients (NYSE: DAR) collects and transforms animal by-products, used cooking oil, and other bio-nutrients into valuable ingredients for food, feed, fuel, and industrial applications.
Why Are We Wary of DAR?
- Annual sales declines of 1.3% for the past three years show its products struggled to connect with the market
- Gross margin of 23.5% is an output of its commoditized products
- Sales were less profitable over the last three years as its earnings per share fell by 42.7% annually, worse than its revenue declines
Darling Ingredients is trading at $42.40 per share, or 20.5x forward P/E. To fully understand why you should be careful with DAR, check out our full research report (it’s free).
One Small-Cap Stock to Watch:
Old National Bank (ONB)
Market Cap: $9.23 billion
Tracing its roots back to 1834 when Andrew Jackson was president, Old National Bancorp (NASDAQ: ONB) is a bank holding company that provides commercial and consumer loans, deposit services, wealth management, and treasury solutions primarily throughout the Midwest region.
Why Could ONB Be a Winner?
- Annual net interest income growth of 28.1% over the past five years was outstanding, reflecting market share gains this cycle
- Expected net interest income growth of 17.6% for the next year suggests its market share will rise
- Anticipated efficiency ratio improvement of -7 percentage points over the next year signals it will gain leverage on its fixed costs and become more productive
At $23.70 per share, Old National Bank trades at 1x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
