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.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here is one small-cap stock that could amplify your portfolio’s returns and two best left ignored.
Two small-cap stocks to sell:
nCino (NCNO)
Market cap: $2.45 billion
Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ:NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.
Why Is NCNO Not Exciting?
- Average billings growth of 9.6% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 8% for the next 12 months implies demand will slow from its two-year trend
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 62.2%
nCino is trading at $22.69 per share, or 3.6x forward price-to-sales. If you’re considering NCNO for your portfolio, see our FREE research report to learn more.
Triumph Financial (TFIN)
Market cap: $1.53 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 Does TFIN Give Us Pause?
- 1.6% annual net interest income growth over the last five years was slower than its banking peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 19.1% annually
- Tier one capital ratio of 9.5% raises concerns about the firm’s ability to maintain adequate liquidity
Triumph Financial’s stock price of $63.95 implies a valuation ratio of 1.6x forward P/B. Check out our free in-depth research report to learn more about why TFIN doesn’t pass our bar.
One small-cap stock to buy:
Advanced Energy (AEIS)
Market cap: $8.70 billion
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ:AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.
Why Is AEIS a Good Business?
- Impressive 24.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 40.3%
- Earnings per share grew by 69% annually over the last two years and trumped its peers
At $238.45 per share, Advanced Energy trades at 15.2x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.