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 amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
Gray Television (GTN)
Market Cap: $462 million
Specializing in local media coverage, Gray Television (NYSE: GTN) is a broadcast company supplying digital media to various markets in the United States.
Why Should You Dump GTN?
- Annual revenue declines of 2% over the last two years indicate problems with its market positioning
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 29.8% annually
- 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $4.49 per share, Gray Television trades at 0.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why GTN doesn’t pass our bar.
Insight Enterprises (NSIT)
Market Cap: $2.55 billion
With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.
Why Do We Pass on NSIT?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Earnings per share lagged its peers over the last two years as they only grew by 1.9% annually
Insight Enterprises is trading at $82.16 per share, or 8.1x forward P/E. Dive into our free research report to see why there are better opportunities than NSIT.
One Small-Cap Stock to Buy:
Badger Meter (BMI)
Market Cap: $4.96 billion
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE: BMI) provides water control and measure equipment to various industries.
Why Is BMI a Top Pick?
- Annual revenue growth of 16.1% over the past two years was outstanding, reflecting market share gains this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 27.3% outpaced its revenue gains
- Strong free cash flow margin of 15.5% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
Badger Meter’s stock price of $167 implies a valuation ratio of 31.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
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 9 Market-Beating Stocks. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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