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.
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 be the next big thing and two best left ignored.
Two Small-Cap Stocks to Sell:
MGM Resorts (MGM)
Market Cap: $9.38 billion
Operating several properties on the Las Vegas Strip, MGM Resorts (NYSE: MGM) is a global hospitality and entertainment company known for its resorts and casinos.
Why Should You Dump MGM?
- Annual sales growth of 4.2% over the last two years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
MGM Resorts is trading at $36.70 per share, or 17.5x forward P/E. If you’re considering MGM for your portfolio, see our FREE research report to learn more.
Perella Weinberg (PWP)
Market Cap: $1.30 billion
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ: PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Why Do We Avoid PWP?
- Earnings per share have contracted by 25.2% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
- Negative return on equity shows management lost money while trying to expand the business
Perella Weinberg’s stock price of $18.64 implies a valuation ratio of 14.5x forward P/E. Dive into our free research report to see why there are better opportunities than PWP.
One Small-Cap Stock to Buy:
CLEAR Secure (YOU)
Market Cap: $4.81 billion
Recognized by its signature blue lanes and biometric pods at airport checkpoints across America, CLEAR Secure (NYSE: YOU) provides biometric identity verification technology that allows subscribers to bypass regular security lines at airports and access secure experiences at various venues.
Why Is YOU a Top Pick?
- Impressive 21.2% annual revenue growth over the last two years indicates it’s winning market share
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- YOU is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $48.08 per share, CLEAR Secure trades at 4.7x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI 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%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. 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 (+1,326% between June 2020 and June 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.
