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.
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. That said, here are two small-cap stocks that could be the next 100 baggers and one that could be down big.
One Small-Cap Stock to Sell:
Lincoln Educational (LINC)
Market Cap: $733.5 million
Established in 1946, Lincoln Educational (NASDAQ: LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.
Why Should You Sell LINC?
- Performance surrounding its enrolled students has lagged its peers
- Cash-burning history makes us doubt the long-term viability of its business model
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Lincoln Educational is trading at $23.20 per share, or 31.3x forward P/E. Read our free research report to see why you should think twice about including LINC in your portfolio.
Two Small-Cap Stocks to Watch:
CECO Environmental (CECO)
Market Cap: $1.80 billion
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
Why Are We Bullish on CECO?
- Annual revenue growth of 18.6% over the last two years was superb and indicates its market share increased during this cycle
- Market share is on track to rise over the next 12 months as its 22.3% projected revenue growth implies demand will accelerate from its two-year trend
- Adjusted operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
At $50.96 per share, CECO Environmental trades at 41.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Primerica (PRI)
Market Cap: $8.58 billion
With a sales force of over 140,000 licensed representatives operating on an independent contractor model, Primerica (NYSE: PRI) provides term life insurance, investment products, and other financial services to middle-income households in the United States and Canada.
Why Should PRI Be on Your Watchlist?
- Pre-tax profit margin improvement of 6 percentage points over the last four years demonstrates its ability to scale efficiently
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 18.2% exceeded its revenue gains over the last five years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Primerica’s stock price of $264.90 implies a valuation ratio of 3.5x forward P/B. 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
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 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-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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