2 Small-Cap Stocks on Our Watchlist and 1 Facing Headwinds

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.

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 are two small-cap stocks that could amplify your portfolio’s returns and one that may have trouble.

One Small-Cap Stock to Sell:

YETI (YETI)

Market Cap: $3.54 billion

Founded by two brothers from Texas, YETI (NYSE:YETI) specializes in durable outdoor goods including coolers, drinkware, and other gear tailored to adventure enthusiasts.

Why Should You Sell YETI?

1. Sales trends were unexciting over the last five years as its 11.3% annual growth was below the typical consumer discretionary company
2. Free cash flow margin is projected to show no improvement next year
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

YETI’s stock price of $44.16 implies a valuation ratio of 16x forward P/E. If you’re considering YETI for your portfolio, see our FREE research report to learn more.

Two Small-Cap Stocks to Watch:

Ollie's (OLLI)

Market Cap: $6.61 billion

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ:OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Why Could OLLI Be a Winner?

1. Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
2. Comparable store sales rose by 3.2% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
3. Demand for the next 12 months is expected to accelerate above its three-year trend as Wall Street forecasts robust revenue growth of 14.8%

Ollie's is trading at $107.18 per share, or 25x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Popular (BPOP)

Market Cap: $9.22 billion

Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ:BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States.

Why Is BPOP a Good Business?

1. Net interest margin expanded by 54.8 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
2. Share repurchases over the last two years enabled its annual earnings per share growth of 22.1% to outpace its revenue gains
3. Annual tangible book value per share growth of 18.9% over the past two years was outstanding, reflecting strong capital accumulation this cycle

At $141.76 per share, Popular trades at 1.3x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.