1 Small-Cap Stock with Exciting Potential and 2 to 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.
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. Keeping that in mind, here is one small-cap stock that could amplify your portfolio's returns and two that could be down big.
Market Cap: $1.05 billion
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ:TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
Why Is TXG Risky?
Cash burn makes us question whether it can achieve sustainable long-term growth
Negative returns on capital show that some of its growth strategies have backfired, and its decreasing returns suggest its historical profit centers are aging
Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions
At $8.45 per share, 10x Genomics trades at 1.8x forward price-to-sales. Read our free research report to see why you should think twice about including TXG in your portfolio, it's free.
Market Cap: $8.90 billion
With a history dating back to 1902 and roots in the McCann-Erickson agency, Interpublic Group (NYSE:IPG) is a marketing and communications holding company that owns agencies specializing in advertising, media buying, public relations, and digital marketing services.
Why Should You Dump IPG?
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 are projected to tank by 3.2% over the next 12 months as its demand continues evaporating
9.6 percentage point decline in its free cash flow margin over the last five years reflects the company's increased investments to defend its market position
Interpublic Group's stock price of $24.06 implies a valuation ratio of 8.9x forward P/E. To fully understand why you should be careful with IPG, check out our full research report (it's free).
Market Cap: $910.7 million
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE:AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Does AGL Stand Out?
Annual revenue growth of 40.5% over the past two years was outstanding, reflecting market share gains this cycle
Customer trends over the past two years show it's maintaining a steady flow of new contracts that can potentially increase in value over time
Earnings growth has trumped its peers over the last three years as its EPS has compounded at 14.5% annually
agilon health is trading at $2.25 per share, or 0.1x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it's free.
The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking 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 176% over the last five years.
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.
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