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. That said, here is one small-cap stock that could be the next 100 bagger and two that could be down big.
Two Small-Cap Stocks to Sell:
Kemper (KMPR)
Market Cap: $3.35 billion
Originally known as Unitrin until rebranding in 2011, Kemper (NYSE: KMPR) is an insurance holding company that provides automobile, homeowners, life, and other insurance products to individuals and businesses across the United States.
Why Is KMPR Risky?
- Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last five years
- Earnings per share fell by 2% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 6.3% annually over the last five years
Kemper is trading at $53.40 per share, or 1.1x forward P/B. Read our free research report to see why you should think twice about including KMPR in your portfolio.
Sezzle (SEZL)
Market Cap: $3.01 billion
Founded in 2016 as an alternative to traditional credit cards for younger shoppers, Sezzle (NASDAQ: SEZL) provides a payment platform that allows consumers to split purchases into four interest-free installments over six weeks at participating retailers.
Why Do We Think Twice About SEZL?
- Negative return on equity shows management lost money while trying to expand the business
Sezzle’s stock price of $89 implies a valuation ratio of 23.9x forward P/E. Check out our free in-depth research report to learn more about why SEZL doesn’t pass our bar.
One Small-Cap Stock to Watch:
FirstSun Capital Bancorp (FSUN)
Market Cap: $1.02 billion
Tracing its roots back to 1892 when it first opened its doors in Kansas, FirstSun Capital Bancorp (NASDAQ: FSUN) operates Sunflower Bank, providing commercial and consumer banking services to businesses and individuals across the Southwest region.
Why Do We Like FSUN?
- Impressive 18.7% annual net interest income growth over the last five years indicates it’s winning market share this cycle
- Efficiency ratio improved by 11.8 percentage points over the last four years as it scaled
- Balance sheet strength has increased this cycle as its 8.8% annual tangible book value per share growth over the last four years was exceptional
At $36.51 per share, FirstSun Capital Bancorp trades at 0.9x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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-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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