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 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:
iHeartMedia (IHRT)
Market Cap: $499.3 million
Occasionally featuring celebrity hosts like Ryan Seacrest on its shows, iHeartMedia (NASDAQ:IHRT) is a leading multimedia company renowned for its extensive network of radio stations, digital platforms, and live events across the globe.
Why Should You Dump IHRT?
- 4.9% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
iHeartMedia’s stock price of $3.55 implies a valuation ratio of 7.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why IHRT doesn’t pass our bar.
Arbor Realty Trust (ABR)
Market Cap: $1.51 billion
With roots dating back to 2003 and a focus on the stability of multifamily housing, Arbor Realty Trust (NYSE:ABR) is a specialized lender that provides financing solutions for multifamily and commercial real estate while also originating and servicing government-backed mortgage loans.
Why Are We Out on ABR?
- Sales tumbled by 14.8% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Annual tangible book value per share declines of 4% for the past two years show its capital management struggled during this cycle
At $7.73 per share, Arbor Realty Trust trades at 0.7x forward P/B. Read our free research report to see why you should think twice about including ABR in your portfolio.
One Small-Cap Stock to Watch:
The Bancorp (TBBK)
Market Cap: $2.48 billion
Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ:TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.
Why Does TBBK Stand Out?
- Annual net interest income growth of 14% over the past five years was outstanding, reflecting market share gains this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 28.9% to outpace its revenue gains
- Projected tangible book value per share growth of 127% for the next 12 months is above its two-year trend, pointing to accelerating profitability
The Bancorp is trading at $58.57 per share, or 3.2x forward P/B. Is now a good time to buy? Find out in our full 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 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.