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.
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 that could be down big.
Two Small-Cap Stocks to Sell:
Sotera Health Company (SHC)
Market Cap: $4.91 billion
With a critical role in ensuring the safety of millions of patients worldwide, Sotera Health (NASDAQGS:SHC) provides sterilization services, lab testing, and advisory services to ensure medical devices, pharmaceuticals, and food products are safe for use.
Why Does SHC Worry Us?
- Subscale operations are evident in its revenue base of $1.15 billion, meaning it has fewer distribution channels than its larger rivals
- Estimated sales growth of 4.2% for the next 12 months implies demand will slow from its two-year trend
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.7 percentage points
Sotera Health Company is trading at $17.29 per share, or 18.6x forward P/E. Check out our free in-depth research report to learn more about why SHC doesn’t pass our bar.
ePlus (PLUS)
Market Cap: $2.32 billion
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
Why Are We Hesitant About PLUS?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Projected sales decline of 2.1% for the next 12 months points to an even tougher demand environment ahead
- Earnings per share have dipped by 5.5% annually over the past two years, which is concerning because stock prices follow EPS over the long term
ePlus’s stock price of $89.07 implies a valuation ratio of 20.3x forward P/E. Read our free research report to see why you should think twice about including PLUS in your portfolio.
One Small-Cap Stock to Watch:
Vicor (VICR)
Market Cap: $4.96 billion
Founded by a researcher at the Massachusetts Institute of Technology, Vicor (NASDAQ:VICR) provides electrical power conversion and delivery products for a range of industries.
Why Do We Watch VICR?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 9.9% annual sales growth over the last five years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 26.1% over the last two years outstripped its revenue performance
- Free cash flow margin jumped by 21.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $111.65 per share, Vicor trades at 52.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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.