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. Keeping that in mind, here is one small-cap stock that could be the next 100 bagger and two that may have trouble.
Two Small-Cap Stocks to Sell:
MarineMax (HZO)
Market Cap: $461.9 million
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE: HZO) sells boats, yachts, and other marine products.
Why Do We Think Twice About HZO?
- Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $21.51 per share, MarineMax trades at 8.2x forward P/E. Check out our free in-depth research report to learn more about why HZO doesn’t pass our bar.
Red Rock Resorts (RRR)
Market Cap: $2.80 billion
Founded in 1976, Red Rock Resorts (NASDAQ: RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.
Why Do We Steer Clear of RRR?
- Annual revenue growth of 1.7% over the last five years was below our standards for the consumer discretionary sector
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Diminishing returns on capital suggest its earlier profit pools are drying up
Red Rock Resorts’s stock price of $45.99 implies a valuation ratio of 28.8x forward P/E. Dive into our free research report to see why there are better opportunities than RRR.
One Small-Cap Stock to Watch:
DXP (DXPE)
Market Cap: $1.31 billion
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ: DXPE) provides pumps, valves, and other industrial components.
Why Are We Fans of DXPE?
- Operating margin improvement of 5.6 percentage points over the last five years demonstrates its ability to scale efficiently
- Share buybacks catapulted its annual earnings per share growth to 34.6%, which outperformed its revenue gains over the last two years
- Improving returns on capital reflect management’s ability to monetize investments
DXP is trading at $83.22 per share, or 15.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
