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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could be the next big thing and two that may have trouble.

Two Small-Cap Stocks to Sell:

Monarch (MCRI)

Market Cap: $1.85 billion

Established in 1993, Monarch (NASDAQ: MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.

Why Are We Cautious About MCRI?

1. 4% annual revenue growth over the last two years was slower than its consumer discretionary peers
2. Projected sales growth of 4.4% for the next 12 months suggests sluggish demand

Monarch’s stock price of $101.41 implies a valuation ratio of 20.3x forward P/E. If you’re considering MCRI for your portfolio, see our FREE research report to learn more.

Knowles (KN)

Market Cap: $1.72 billion

With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.

Why Do We Avoid KN?

1. Sales tumbled by 5.3% annually over the last five years, showing market trends are working against its favor during this cycle
2. Subscale operations are evident in its revenue base of $563.1 million, meaning it has fewer distribution channels than its larger rivals
3. Underwhelming 7.8% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

Knowles is trading at $19.99 per share, or 16.5x forward P/E. Check out our free in-depth research report to learn more about why KN doesn’t pass our bar.

One Small-Cap Stock to Watch:

Ameris Bancorp (ABCB)

Market Cap: $4.56 billion

Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.

Why Are We Positive On ABCB?

1. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 15% outpaced its revenue gains
2. Impressive 14.6% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

At $66.60 per share, Ameris Bancorp trades at 1.1x 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.

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