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 amplify your portfolio’s returns and two that could be down big.
Two Small-Cap Stocks to Sell:
Triumph Financial (TFIN)
Market Cap: $1.68 billion
Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NYSE:TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.
Why Do We Pass on TFIN?
- 2.9% annual net interest income growth over the last five years was slower than its banking peers
- 116.2 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
- Earnings per share fell by 22.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Triumph Financial’s stock price of $70.59 implies a valuation ratio of 1.8x forward P/B. Dive into our free research report to see why there are better opportunities than TFIN.
LendingTree (TREE)
Market Cap: $536.5 million
Using the same comparison model that revolutionized travel booking, LendingTree (NASDAQ:TREE) operates an online platform that connects consumers with financial service providers across mortgages, personal loans, credit cards, insurance, and other financial products.
Why Does TREE Give Us Pause?
- Excessive marketing spend signals little organic demand and traction for its platform
LendingTree is trading at $38.49 per share, or 0.4x forward price-to-gross profit. Check out our free in-depth research report to learn more about why TREE doesn’t pass our bar.
One Small-Cap Stock to Watch:
Matrix Service (MTRX)
Market Cap: $372.2 million
Founded in Oklahoma, Matrix Service (NASDAQ:MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Why Does MTRX Stand Out?
- Projected revenue growth of 12% for the next 12 months indicates demand will rise above its two-year trend
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 58.2% over the last two years outstripped its revenue performance
- Free cash flow margin jumped by 8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $13.22 per share, Matrix Service trades at 18.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.