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.

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 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:

Vontier (VNT)

Market Cap: $5.69 billion

A spin-off of a spin-off, Vontier (NYSE: VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.

Why Do We Steer Clear of VNT?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Free cash flow margin dropped by 14.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Vontier’s stock price of $38.45 implies a valuation ratio of 12.1x forward P/E. If you’re considering VNT for your portfolio, see our FREE research report to learn more.

NN (NNBR)

Market Cap: $109 million

Formerly known as Nuturn, NN (NASDAQ: NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Should You Sell NNBR?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.3% annually over the last five years
2. Sales were less profitable over the last five years as its earnings per share fell by 17.5% annually, worse than its revenue declines
3. Increased cash burn over the last five years raises questions about the return timeline for its investments

At $2.16 per share, NN trades at 322.8x forward P/E. To fully understand why you should be careful with NNBR, check out our full research report (it’s free).

One Small-Cap Stock to Watch:

Trustmark (TRMK)

Market Cap: $2.34 billion

Tracing its roots back to 1889 in Mississippi, Trustmark (NASDAQ: TRMK) is a financial services organization providing banking, wealth management, insurance, and mortgage services across five southeastern states.

Why Are We Positive On TRMK?

1. Annual net interest income growth of 9.2% over the last four years was above the sector average and underscores its loans' value to borrowers
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 9.5% annually, topping its revenue gains
3. Annual tangible book value per share growth of 20.2% over the past two years was outstanding, reflecting strong capital accumulation this cycle

Trustmark is trading at $38.70 per share, or 1.1x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.