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.
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:
Himax (HIMX)
Market Cap: $1.35 billion
Taiwan-based Himax Technologies (NASDAQ: HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Why Should You Sell HIMX?
- Sales tumbled by 6% annually over the last two years, showing market trends are working against its favor during this cycle
- Sales are projected to tank by 4.4% over the next 12 months as its demand continues evaporating
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 22.9 percentage points
Himax’s stock price of $7.70 implies a valuation ratio of 51.6x forward P/E. Dive into our free research report to see why there are better opportunities than HIMX.
WideOpenWest (WOW)
Market Cap: $430.3 million
Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
Why Are We Out on WOW?
- Performance surrounding its subscribers has lagged its peers
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
WideOpenWest is trading at $5.19 per share, or 1.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including WOW in your portfolio.
One Small-Cap Stock to Watch:
Core & Main (CNM)
Market Cap: $9.34 billion
Formerly a division of industrial distributor HD Supply, Core & Main (NYSE: CNM) is a provider of water, wastewater, and fire protection products and services.
Why Do We Like CNM?
- Impressive 17.3% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Share buybacks catapulted its annual earnings per share growth to 20.5%, which outperformed its revenue gains over the last two years
- Free cash flow margin expanded by 7.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $49 per share, Core & Main trades at 20.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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