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.
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 big thing and two best left ignored.
Two Small-Cap Stocks to Sell:
Central Garden & Pet (CENT)
Market Cap: $2.42 billion
Enhancing the lives of both pets and homeowners, Central Garden & Pet (NASDAQ: CENT) is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control.
Why Does CENT Fall Short?
- Annual revenue declines of 1% over the last three years indicate problems with its market positioning
- Sales are projected to tank by 8.2% over the next 12 months as its demand continues evaporating
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $43.06 per share, Central Garden & Pet trades at 14.1x forward P/E. Dive into our free research report to see why there are better opportunities than CENT.
Origin Bancorp (OBK)
Market Cap: $1.59 billion
Founded in 1912 during the early boom days of Louisiana banking, Origin Bancorp (NYSE: OBK) is a financial holding company that provides personalized banking services to businesses, municipalities, and individuals across Texas, Louisiana, and Mississippi.
Why Is OBK Not Exciting?
- Annual revenue growth of 8.2% over the last five years was below our standards for the banking sector
- Incremental sales over the last five years were less profitable as its 6.8% annual earnings per share growth lagged its revenue gains
- Estimated tangible book value per share growth of 9% for the next 12 months is soft and implies weaker profitability
Origin Bancorp’s stock price of $51.54 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including OBK in your portfolio.
One Small-Cap Stock to Buy:
Kinsale Capital Group (KNSL)
Market Cap: $7.37 billion
Founded in 2009 during the aftermath of the financial crisis when many insurers were retreating from riskier markets, Kinsale Capital Group (NYSE: KNSL) is an insurance company that specializes in writing policies for hard-to-place, unusual, or high-risk businesses that standard insurers typically avoid.
Why Is KNSL a Top Pick?
- Strong 18.8% annualized net premiums earned expansion over the last two years shows it’s capturing market share this cycle
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 42.9% annually, topping its revenue gains
- Impressive 30.2% annual book value per share growth over the last two years indicates it’s building equity value this cycle
Kinsale Capital Group is trading at $318.26 per share, or 3.5x forward P/B. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
