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 amplify your portfolio’s returns and two that may have trouble.
Two Small-Cap Stocks to Sell:
AMC Networks (AMCX)
Market Cap: $364.4 million
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.
Why Are We Out on AMCX?
- Annual revenue declines of 4% over the last five years indicate problems with its market positioning
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
AMC Networks is trading at $8.40 per share, or 2.8x forward P/E. Read our free research report to see why you should think twice about including AMCX in your portfolio.
ManpowerGroup (MAN)
Market Cap: $1.73 billion
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE: MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
Why Is MAN Risky?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 16% annually, worse than its revenue
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $37.34 per share, ManpowerGroup trades at 10.8x forward P/E. If you’re considering MAN for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
Target Hospitality (TH)
Market Cap: $864.1 million
Building mini-communities at places such as oil drilling sites, Target Hospitality (NASDAQ: TH) is a provider of specialty workforce lodging accommodations and services.
Why Are We Positive On TH?
- Healthy operating margin of 25.9% shows it’s a well-run company with efficient processes
- TH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Rising returns on capital show management is finding more attractive investment opportunities
Target Hospitality’s stock price of $8.66 implies a valuation ratio of 34.4x forward EV-to-EBITDA. 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 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-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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