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.
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 amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
ICU Medical (ICUI)
Market Cap: $4.58 billion
Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.
Why Are We Cautious About ICUI?
- Annual sales declines of 2.5% for the past two years show its products and services struggled to connect with the market during this cycle
- Performance over the past five years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue
- Underwhelming 0.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $182.79 per share, ICU Medical trades at 20.6x forward P/E. Dive into our free research report to see why there are better opportunities than ICUI.
Hope Bancorp (HOPE)
Market Cap: $1.85 billion
With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp (NASDAQ: HOPE) operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.
Why Should You Sell HOPE?
- Loans are facing end-market challenges during this cycle, as seen in its flat net interest income over the last five years
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 4.1% annually while its revenue grew
- Tangible book value per share stagnated over the last two years, limiting its ability to leverage its balance sheet to make additional investments
Hope Bancorp is trading at $14.46 per share, or 0.8x forward P/B. If you’re considering HOPE for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
Novanta (NOVT)
Market Cap: $6.3 billion
Originally a pioneer in the laser scanning industry during the late 1960s, Novanta (NASDAQ: NOVT) offers medicine and manufacturing technology to the medical, life sciences, and manufacturing industries.
Why Is NOVT Interesting?
- Annual revenue growth of 10.7% over the past five years was outstanding, reflecting market share gains this cycle
- Exciting sales outlook for the upcoming 12 months calls for 20.5% growth, an acceleration from its two-year trend
- Offerings are difficult to replicate at scale and lead to a stellar gross margin of 44.4%
Novanta’s stock price of $166.53 implies a valuation ratio of 41.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
