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 may have trouble.
Two Small-Cap Stocks to Sell:
Boise Cascade (BCC)
Market Cap: $3.17 billion
Formed through the merger of two lumber companies, Boise Cascade Company (NYSE:BCC) manufactures and distributes wood products and other building materials.
Why Do We Avoid BCC?
- Annual sales declines of 2.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Free cash flow margin shrank by 6.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
Boise Cascade is trading at $84.94 per share, or 26.7x forward P/E. If you’re considering BCC for your portfolio, see our FREE research report to learn more.
Capital Southwest (CSWC)
Market Cap: $1.36 billion
Originally founded in 1961 as a venture capital investor that helped launch Texas Instruments, Capital Southwest (NASDAQ:CSWC) is a business development company that provides debt and equity financing to middle-market companies primarily in the United States.
Why Does CSWC Fall Short?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 5.5% annually
Capital Southwest’s stock price of $23.73 implies a valuation ratio of 10.4x forward P/E. Read our free research report to see why you should think twice about including CSWC in your portfolio.
One Small-Cap Stock to Watch:
Rumble (RUM)
Market Cap: $2.05 billion
Founded in 2013 as a champion for content creator rights and free expression, Rumble (NASDAQ:RUM) is a video sharing platform that positions itself as a free speech alternative to mainstream platforms, offering creators more favorable revenue-sharing opportunities.
Why Do We Watch RUM?
- Annual revenue growth of 85.5% over the past four years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 202%
At $6.06 per share, Rumble trades at 31.3x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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.