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 amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
Molson Coors (TAP)
Market Cap: $9.95 billion
Sporting an impressive roster of iconic beer brands, Molson Coors (NYSE: TAP) is a global brewing giant with a rich history dating back more than two centuries.
Why Are We Hesitant About TAP?
- Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- ROIC of 3.8% reflects management’s challenges in identifying attractive investment opportunities
Molson Coors is trading at $50.25 per share, or 8.2x forward P/E. Dive into our free research report to see why there are better opportunities than TAP.
Sanmina (SANM)
Market Cap: $6.24 billion
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Is SANM Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6% annually over the last two years
- Gross margin of 8.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings per share have dipped by 3.8% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Sanmina’s stock price of $117.09 implies a valuation ratio of 17x forward P/E. To fully understand why you should be careful with SANM, check out our full research report (it’s free).
One Small-Cap Stock to Watch:
Preferred Bank (PFBC)
Market Cap: $1.16 billion
Founded in 1991 with a focus on serving the Pacific Rim community in Southern California, Preferred Bank (NASDAQ: PFBC) is a commercial bank that provides banking products and services to small and mid-sized businesses, entrepreneurs, real estate developers, and high net worth individuals.
Why Does PFBC Stand Out?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 14.8% exceeded its revenue gains over the last five years
- Annual tangible book value per share growth of 12.9% over the last five years was superb and indicates its capital strength increased during this cycle
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $93.82 per share, Preferred Bank trades at 1.5x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
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 9 Market-Beating Stocks. 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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