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. That said, here is one small-cap stock that could be the next big thing and two that may have trouble.
Two Small-Cap Stocks to Sell:
Gray Television (GTN)
Market Cap: $425.7 million
Specializing in local media coverage, Gray Television (NYSE: GTN) is a broadcast company supplying digital media to various markets in the United States.
Why Do We Think GTN Will Underperform?
- Sales trends were unexciting over the last five years as its 5.2% annual growth was below the typical consumer discretionary company
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
At $4.10 per share, Gray Television trades at 5.9x forward EV-to-EBITDA. To fully understand why you should be careful with GTN, check out our full research report (it’s free).
Lincoln Financial Group (LNC)
Market Cap: $8.00 billion
Founded in 1905 by a group of Fort Wayne, Indiana businessmen who named the company after Abraham Lincoln, Lincoln National Corporation (NYSE: LNC) provides insurance, retirement plans, and wealth management products through its subsidiaries, operating under four main segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services.
Why Do We Think Twice About LNC?
- Stagnant net premiums earned over the last five years suggest the firm needs alternative growth strategies
- Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its two-year trend
- Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 14% annually over the last five years
Lincoln Financial Group is trading at $41.57 per share, or 0.8x forward P/B. If you’re considering LNC for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
Affiliated Managers Group (AMG)
Market Cap: $9.00 billion
Using a partnership approach that preserves entrepreneurial culture at its portfolio companies, Affiliated Managers Group (NYSE: AMG) is an investment firm that acquires stakes in boutique asset management companies while allowing them to maintain operational independence.
Why Are We Fans of AMG?
- Share repurchases over the last two years enabled its annual earnings per share growth of 18.6% to outpace its revenue gains
- ROE punches in at 21.3%, illustrating management’s expertise in identifying profitable investments
Affiliated Managers Group’s stock price of $342.50 implies a valuation ratio of 9.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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.
