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 best left ignored.
Two Small-Cap Stocks to Sell:
MarineMax (HZO)
Market Cap: $498.2 million
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE: HZO) sells boats, yachts, and other marine products.
Why Do We Pass on HZO?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Earnings per share have dipped by 54.5% annually over the past three years, which is concerning because stock prices follow EPS over the long term
- High net-debt-to-EBITDA ratio of 10× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $22.78 per share, MarineMax trades at 34x forward P/E. Dive into our free research report to see why there are better opportunities than HZO.
Lindsay (LNN)
Market Cap: $1.24 billion
A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE: LNN) provides a variety of proprietary water management and road infrastructure products and services.
Why Is LNN Not Exciting?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 1.7% annually
Lindsay is trading at $116.95 per share, or 19x forward P/E. If you’re considering LNN for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
CSW (CSW)
Market Cap: $4.56 billion
With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ: CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.
Why Will CSW Outperform?
- Market share has increased this cycle as its 20.6% annual revenue growth over the last five years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 17.8% over the last two years outstripped its revenue performance
- CSW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
CSW’s stock price of $273.38 implies a valuation ratio of 24.1x 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
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Tecnoglass (+1,754% 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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