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.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. 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:
Butterfield Bank (NTB)
Market Cap: $2.17 billion
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Why Does NTB Give Us Pause?
- 3.8% annual net interest income growth over the last five years was slower than its banking peers
- Estimated net interest income growth of 1.1% for the next 12 months implies demand will slow from its five-year trend
- Weak unit economics are reflected in its net interest margin of 2.7%, one of the worst among bank companies
Butterfield Bank is trading at $54.79 per share, or 1.8x forward P/B. To fully understand why you should be careful with NTB, check out our full research report (it’s free).
City Holding (CHCO)
Market Cap: $1.73 billion
With roots dating back to 1957 and a strategic presence along the I-64 and I-81 corridors, City Holding (NASDAQGS:CHCO) operates as a financial holding company providing banking, trust, and investment services through its subsidiary City National Bank across West Virginia, Kentucky, Virginia, and Ohio.
Why Does CHCO Worry Us?
- Muted 9.6% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Estimated net interest income growth of 2.6% for the next 12 months implies demand will slow from its five-year trend
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6.9% annually
At $122.44 per share, City Holding trades at 2.1x forward P/B. If you’re considering CHCO for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
CNX Resources (CNX)
Market Cap: $5.42 billion
Tracing back to operations that began in 1860, CNX Resources (NYSE: CNX) drills for and produces natural gas from underground shale formations in Pennsylvania, Ohio, and West Virginia.
Why Are We Positive On CNX?
- Attractive asset base leads to wonderful unit economics and a premier gross margin of 68.1%
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- CNX is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
CNX Resources’s stock price of $38.31 implies a valuation ratio of 13.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
