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 be the next 100 bagger and two best left ignored.
Two Small-Cap Stocks to Sell:
Littelfuse (LFUS)
Market Cap: $6.03 billion
The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ:LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.
Why Is LFUS Not Exciting?
- 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
- Earnings per share have dipped by 12.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Littelfuse is trading at $242.05 per share, or 19.9x forward P/E. If you’re considering LFUS for your portfolio, see our FREE research report to learn more.
FTI Consulting (FCN)
Market Cap: $4.96 billion
With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE:FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.
Why Does FCN Fall Short?
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 2.7 percentage points
- Free cash flow margin dropped by 9.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
FTI Consulting’s stock price of $163.86 implies a valuation ratio of 19x forward P/E. Read our free research report to see why you should think twice about including FCN in your portfolio.
One Small-Cap Stock to Watch:
BGC (BGC)
Market Cap: $4.28 billion
Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ:BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.
Why Are We Fans of BGC?
- Annual revenue growth of 18.7% over the past two years was outstanding, reflecting market share gains this cycle
- Additional sales over the last two years increased its profitability as the 20.9% annual growth in its earnings per share outpaced its revenue
- Adequate return on equity shows management makes decent investment decisions
At $9.14 per share, BGC trades at 6.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 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-small-cap company Exlservice (+354% 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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