Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.

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 100 bagger and two best left ignored.

Two Small-Cap Stocks to Sell:

OceanFirst Financial (OCFC)

Market Cap: $1.00 billion

Tracing its roots back to 1902 when it began serving coastal New Jersey communities, OceanFirst Financial (NASDAQ: OCFC) operates as a regional bank holding company that provides commercial and consumer banking services primarily in New Jersey and surrounding metropolitan areas.

Why Is OCFC Risky?

1. 2.2% annual net interest income growth over the last four years was slower than its bank peers
2. Earnings per share fell by 5.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. High interest payments compared to its earnings raise concerns about its ability to service its debt consistently

OceanFirst Financial’s stock price of $17.17 implies a valuation ratio of 0.6x forward P/B. Read our free research report to see why you should think twice about including OCFC in your portfolio.

Columbia Financial (CLBK)

Market Cap: $1.50 billion

Founded during the Roaring Twenties in 1926 and headquartered in Fair Lawn, New Jersey, Columbia Financial (NASDAQ: CLBK) operates federally chartered savings banks in New Jersey that offer traditional banking services including loans, deposits, and insurance products.

Why Are We Out on CLBK?

1. Customers borrowered less money this cycle as its net interest income declined by 4.9% annually over the last four years
2. 94.7 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the company’s willingness to accept lower yields to defend its market position
3. Earnings per share have dipped by 6.5% annually over the past five years, which is concerning because stock prices follow EPS over the long term

At $14.33 per share, Columbia Financial trades at 1.3x forward P/B. Dive into our free research report to see why there are better opportunities than CLBK.

One Small-Cap Stock to Buy:

Nextracker (NXT)

Market Cap: $8.51 billion

With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextracker (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.

Why Should You Buy NXT?

1. Sales pipeline is in good shape as its backlog averaged 46.5% growth over the past two years
2. Free cash flow margin increased by 13.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
3. Returns on capital are growing as management capitalizes on its market opportunities

Nextracker is trading at $57.70 per share, or 14.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 Kadant (+351% 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