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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are two small-cap stocks that could amplify your portfolio’s returns and one best left ignored.
One Small-Cap Stock to Sell:
ManpowerGroup (MAN)
Market Cap: $1.36 billion
Founded during the post-World War II economic boom when businesses needed temporary workers, ManpowerGroup (NYSE:MAN) connects millions of people to employment opportunities through its global network of staffing, recruitment, and workforce management services.
Why Do We Steer Clear of MAN?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Sales over the last five years were less profitable as its earnings per share fell by 18.4% annually while its revenue was flat
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
ManpowerGroup is trading at $29.19 per share, or 8.5x forward P/E. Check out our free in-depth research report to learn more about why MAN doesn’t pass our bar.
Two Small-Cap Stocks to Watch:
TaskUs (TASK)
Market Cap: $1.07 billion
Starting as a virtual assistant service in 2008 before evolving into a global digital services provider, TaskUs (NASDAQ:TASK) provides outsourced digital services including customer experience management, content moderation, and AI data services to innovative technology companies.
Why Are We Positive On TASK?
- Annual revenue growth of 21.1% over the last five years was superb and indicates its market share increased during this cycle
- Free cash flow margin grew by 21.6 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
TaskUs’s stock price of $11.82 implies a valuation ratio of 7.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Pinnacle Financial Partners (PNFP)
Market Cap: $6.73 billion
Founded in 2000 with a focus on delivering big-bank capabilities with community bank personalization, Pinnacle Financial Partners (NASDAQ:PNFP) is a Tennessee-based financial holding company that provides banking, investment, trust, mortgage, and insurance services to businesses and individuals.
Why Could PNFP Be a Winner?
- Annual net interest income growth of 13.7% over the past five years was outstanding, reflecting market share gains this cycle
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 6.6% annually
- Annual tangible book value per share growth of 11.6% over the past five years was outstanding, reflecting strong capital accumulation this cycle
At $88 per share, Pinnacle Financial Partners trades at 1x 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
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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