Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
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 best left ignored.
Two Small-Cap Stocks to Sell:
Camping World (CWH)
Market Cap: $639.5 million
Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE: CWH) still sells RVs along with boats and general merchandise for outdoor activities.
Why Are We Out on CWH?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Sales were less profitable over the last three years as its earnings per share fell by 58.4% annually, worse than its revenue declines
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $10.08 per share, Camping World trades at 13.8x forward P/E. To fully understand why you should be careful with CWH, check out our full research report (it’s free for active Edge members).
Purple (PRPL)
Market Cap: $79.61 million
Founded by two brothers, Purple (NASDAQ: PRPL) creates sleep and home comfort products such as mattresses, pillows, and bedding accessories.
Why Is PRPL Risky?
- Products and services have few die-hard fans as sales have declined by 5.3% annually over the last five years
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Purple’s stock price of $0.74 implies a valuation ratio of 17.6x forward EV-to-EBITDA. If you’re considering PRPL for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Watch:
Maximus (MMS)
Market Cap: $4.73 billion
With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE: MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.
Why Are We Positive On MMS?
- Impressive 9.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Economies of scale give it more fixed cost leverage than its smaller competitors
- Share buybacks catapulted its annual earnings per share growth to 34.8%, which outperformed its revenue gains over the last two years
Maximus is trading at $86.84 per share, or 10.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
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 5 Growth Stocks for this month. 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.
