1 Small-Cap Stock with Impressive Fundamentals and 2 We Turn Down

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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one small-cap stock that could amplify your portfolio’s returns and two that may have trouble.

Two Small-Cap Stocks to Sell:

BeautyHealth (SKIN)

Market Cap: $202.7 million

Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ:SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin.

Why Do We Think SKIN Will Underperform?

1. Annual sales declines of 4.4% for the past three years show its products struggled to connect with the market
2. Suboptimal cost structure is highlighted by its history of operating margin losses
3. Earnings per share have dipped by 61.1% annually over the past three years, which is concerning because stock prices follow EPS over the long term

At $1.58 per share, BeautyHealth trades at 5.2x forward EV-to-EBITDA. To fully understand why you should be careful with SKIN, check out our full research report (it’s free for active Edge members).

Cohen & Steers (CNS)

Market Cap: $3.18 billion

Founded in 1986 as a pioneer in real estate investment trusts (REITs), Cohen & Steers (NYSE:CNS) is an investment manager specializing in real estate securities, infrastructure, real assets, and preferred securities for institutional and individual investors.

Why Does CNS Worry Us?

1. 5.5% annual revenue growth over the last two years was slower than its financials peers
2. Incremental sales over the last two years were less profitable as its 2% annual earnings per share growth lagged its revenue gains

Cohen & Steers is trading at $62.40 per share, or 18.3x forward P/E. Check out our free in-depth research report to learn more about why CNS doesn’t pass our bar.

One Small-Cap Stock to Buy:

Huron (HURN)

Market Cap: $2.66 billion

Founded in 2002 during a time of significant regulatory change in corporate America, Huron Consulting Group (NASDAQ:HURN) is a professional services company that helps organizations develop growth strategies, optimize operations, and implement digital transformation solutions.

Why Is HURN a Top Pick?

1. Impressive 12.3% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Free cash flow margin grew by 9 percentage points over the last five years, giving the company more chips to play with
3. Historical investments are beginning to pay off as its returns on capital are growing

Huron’s stock price of $166.25 implies a valuation ratio of 20.1x forward P/E. 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

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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