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. That said, here are two small-cap stocks that could be the next big thing and one that may have trouble.
One Small-Cap Stock to Sell:
TFS Financial (TFSL)
Market Cap: $3.98 billion
Tracing its roots back to 1938 during the Great Depression era when savings and loans were vital to homeownership, TFS Financial (NASDAQ: TFSL) is a savings and loan holding company that provides mortgage lending, deposit services, and other retail banking products primarily in Ohio and Florida.
Why Should You Dump TFSL?
- Annual net interest income growth of 3.9% over the last five years was below our standards for the banking sector
- Inferior net interest margin of 1.7% means it must compensate for lower profitability through increased loan originations
- Earnings per share lagged its peers over the last five years as they only grew by 2% annually
TFS Financial is trading at $14.28 per share, or 2.1x forward P/B. Dive into our free research report to see why there are better opportunities than TFSL.
Two Small-Cap Stocks to Watch:
Mirion (MIR)
Market Cap: $5.15 billion
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE: MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Why Do We Watch MIR?
- Market share has increased this cycle as its 11.8% annual revenue growth over the last five years was exceptional
- Operating margin improvement of 10.4 percentage points over the last five years demonstrates its ability to scale efficiently
- Free cash flow margin expanded by 11.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $21.45 per share, Mirion trades at 37.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Molina Healthcare (MOH)
Market Cap: $7.64 billion
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Do We Like MOH?
- Impressive 18.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Economies of scale give it fixed cost leverage when sales grow as well as negotiating power over membership pricing and reimbursement rates
Molina Healthcare’s stock price of $149.01 implies a valuation ratio of 22.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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 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.
