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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one small-cap stock that could be the next 100 bagger and two that could be down big.
Two Small-Cap Stocks to Sell:
PlayStudios (MYPS)
Market Cap: $55.14 million
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
Why Do We Steer Clear of MYPS?
- Sales tumbled by 4.1% annually over the last five years, showing consumer trends are working against it
- Poor free cash flow margin of 12.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $0.46 per share, PlayStudios trades at 0.3x forward price-to-sales. Check out our free in-depth research report to learn more about why MYPS doesn’t pass our bar.
Movado (MOV)
Market Cap: $538.8 million
With its watches displayed in 20 museums around the world, Movado (NYSE:MOV) is a watchmaking company with a portfolio of watch brands and accessories.
Why Is MOV Risky?
- Flat sales over the last five years suggest it must innovate and find new ways to grow
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.5% for the last two years
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Movado is trading at $32.24 per share, or 9.8x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including MOV in your portfolio.
One Small-Cap Stock to Watch:
Amalgamated Financial (AMAL)
Market Cap: $1.44 billion
Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.
Why Do We Like AMAL?
- Solid 12.9% annual net interest income growth over the last five years indicates its offerings are gaining share
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 17.3% exceeded its revenue gains over the last five years
- Balance sheet strength has increased this cycle as its 10% annual tangible book value per share growth over the last five years was exceptional
Amalgamated Financial’s stock price of $48.01 implies a valuation ratio of 1.6x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.