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 100 bagger and two best left ignored.

Two Small-Cap Stocks to Sell:

American Woodmark (AMWD)

Market Cap: $989.4 million

Starting as a small millwork shop, American Woodmark (NASDAQ: AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.

Why Are We Out on AMWD?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 9.6% annually over the last two years
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term

American Woodmark is trading at $67.91 per share, or 13.7x forward P/E. If you’re considering AMWD for your portfolio, see our FREE research report to learn more.

Byline Bancorp (BY)

Market Cap: $1.25 billion

Ranking as the fifth most active Small Business Administration lender in the country, Byline Bancorp (NYSE: BY) is a Chicago-based bank that provides banking services to small and medium-sized businesses, commercial real estate developers, and consumers.

Why Does BY Worry Us?

1. Estimated net interest income growth of 4.6% for the next 12 months implies demand will slow from its five-year trend
2. 20.3 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
3. Overall productivity is expected to decrease over the next year as Wall Street thinks its efficiency ratio will degrade by 2.6 percentage points

Byline Bancorp’s stock price of $27.36 implies a valuation ratio of 1x forward P/B. To fully understand why you should be careful with BY, check out our full research report (it’s free).

One Small-Cap Stock to Watch:

Universal Display (OLED)

Market Cap: $7.00 billion

Serving major consumer electronics manufacturers, Universal Display (NASDAQ: OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.

Why Are We Positive On OLED?

1. Annual revenue growth of 12.4% over the last five years beat the sector average and underscores the unique value of its offerings
2. Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 75.4%
3. Highly efficient business model is illustrated by its impressive 38.1% operating margin

At $146.50 per share, Universal Display trades at 31.6x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our 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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