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 be the next big thing and two that could be down big.

Two Small-Cap Stocks to Sell:

Matson (MATX)

Market Cap: $4.95 billion

Founded by a Swedish orphan, Matson (NYSE: MATX) is a provider of ocean transportation and logistics services.

Why Does MATX Fall Short?

1. 4.3% annual revenue growth over the last two years was slower than its industrials peers
2. Free cash flow margin shrank by 8.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Eroding returns on capital suggest its historical profit centers are aging

At $158.82 per share, Matson trades at 11.9x forward P/E. Check out our free in-depth research report to learn more about why MATX doesn’t pass our bar.

Chemed (CHE)

Market Cap: $6.32 billion

With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.

Why Does CHE Give Us Pause?

1. Weak billable days over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 4.3 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

Chemed’s stock price of $447.62 implies a valuation ratio of 17.9x forward P/E. Read our free research report to see why you should think twice about including CHE in your portfolio.

One Small-Cap Stock to Buy:

EVERTEC (EVTC)

Market Cap: $1.89 billion

Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE: EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.

Why Will EVTC Beat the Market?

1. Impressive 16.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Annual earnings per share growth of 12.5% over the last five years modestly outpaced its peers
3. Stellar return on equity showcases management’s ability to surface highly profitable business ventures

EVERTEC is trading at $29.57 per share, or 8.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.