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.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. 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:
Photronics (PLAB)
Market Cap: $1.89 billion
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Are We Hesitant About PLAB?
- Annual sales declines of 1.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Anticipated sales growth of 1.8% for the next year implies demand will be shaky
- Gross margin of 35% is below its competitors, leaving less money to invest in areas like marketing and R&D
Photronics’s stock price of $31.74 implies a valuation ratio of 17.7x forward P/E. Dive into our free research report to see why there are better opportunities than PLAB.
Titan International (TWI)
Market Cap: $494.4 million
Acquiring Goodyear’s farm tire business in 2005, Titan (NYSE: TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.
Why Should You Sell TWI?
- 2.5% annual revenue growth over the last two years was slower than its industrials peers
- Diminishing returns on capital suggest its earlier profit pools are drying up
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $7.54 per share, Titan International trades at 462.5x forward P/E. If you’re considering TWI for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
MSA Safety (MSA)
Market Cap: $6.35 billion
Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE: MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.
Why Does MSA Stand Out?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 14.1% exceeded its revenue gains over the last five years
- Free cash flow margin increased by 6.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Improving returns on capital reflect management’s ability to monetize investments
MSA Safety is trading at $166.01 per share, or 18.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
