Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
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 big thing and one that could be down big.
One Small-Cap Stock to Sell:
The Marzetti Company (MZTI)
Market Cap: $4.59 billion
Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ: MZTI) sells bread, dressing, and dips to the retail and food service channels.
Why Does MZTI Fall Short?
- Muted 4% annual revenue growth over the last three years shows its demand lagged behind its consumer staples peers
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its three-year trend
- Gross margin of 23.4% is below its competitors, leaving less money to invest in areas like marketing and production facilities
The Marzetti Company is trading at $166.71 per share, or 23.3x forward P/E. Read our free research report to see why you should think twice about including MZTI in your portfolio.
Two Small-Cap Stocks to Watch:
F&G Annuities & Life (FG)
Market Cap: $4.64 billion
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE: FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
Why Is FG a Top Pick?
- Net premiums earned surged by 28.6% annually over the past two years, reflecting strong market share gains this cycle
- Balance sheet strength has increased this cycle as its 37.7% annual book value per share growth over the last two years was exceptional
- Capital strength is on track to rise over the next 12 months as its 41% projected book value per share growth implies profitability will accelerate from its two-year trend
At $34.46 per share, F&G Annuities & Life trades at 0.9x forward P/B. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
First BanCorp (FBP)
Market Cap: $3.32 billion
Tracing its roots back to 1948 in San Juan, First BanCorp (NYSE: FBP) is a bank holding company that provides commercial banking, consumer financing, mortgage services, and insurance products across Puerto Rico, the U.S. mainland, and the Caribbean.
Why Are We Positive On FBP?
- Differentiated product suite leads to a Strong performance of its loan book is reflected in its High-yielding loan book and low cost of funds are reflected in its best-in-class net interest margin of 4.5%
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Annual tangible book value per share growth of 28.4% over the past two years was outstanding, reflecting strong capital accumulation this cycle
First BanCorp’s stock price of $21.16 implies a valuation ratio of 1.7x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 Kadant (+351% 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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