Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here are two small-cap stocks that could be the next 100 baggers and one best left ignored.
One Small-Cap Stock to Sell:
Northwest Bancshares (NWBI)
Market Cap: $1.94 billion
Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ: NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.
Why Do We Steer Clear of NWBI?
- Sales trends were unexciting over the last five years as its 4.4% annual growth was below the typical banking company
- 6% annual net interest income growth over the last five years was slower than its banking peers
- 2.5% annual tangible book value per share growth over the last two years was slower than its banking peers
Northwest Bancshares is trading at $13.29 per share, or 1x forward P/B. Read our free research report to see why you should think twice about including NWBI in your portfolio.
Two Small-Cap Stocks to Watch:
Installed Building Products (IBP)
Market Cap: $7.64 billion
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Why Do We Like IBP?
- Market share has increased this cycle as its 12.4% annual revenue growth over the last five years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 21.4% exceeded its revenue gains over the last five years
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are climbing as it finds even more attractive growth opportunities
Installed Building Products’s stock price of $283.74 implies a valuation ratio of 25.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Helmerich & Payne (HP)
Market Cap: $3.45 billion
Operating the largest fleet of super-spec rigs in North America with technology that can drill horizontal wells over two miles long, Helmerich & Payne (NYSE: HP) provides drilling rigs and crews to oil and gas companies that need wells drilled to extract hydrocarbons from underground.
Why Is HP Interesting?
- Market share has increased this cycle as its 25.4% annual revenue growth over the last five years was exceptional
- Economies of scale give it some operating leverage when demand rises
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
At $34.34 per share, Helmerich & Payne trades at 65.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
