1 Small-Cap Stock for Long-Term Investors 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 be the next 100 bagger and two that may have trouble.

Two Small-Cap Stocks to Sell:

ANI Pharmaceuticals (ANIP)

Market Cap: $1.64 billion

With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ:ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.

Why Does ANIP Give Us Pause?

1. Revenue base of $883.4 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Expenses have increased as a percentage of revenue over the last two years as its adjusted operating margin fell by 1.6 percentage points
3. Negative returns on capital show management lost money while trying to expand the business

ANI Pharmaceuticals’s stock price of $78.38 implies a valuation ratio of 8.9x forward P/E. Read our free research report to see why you should think twice about including ANIP in your portfolio.

Eastern Bank (EBC)

Market Cap: $4.63 billion

Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ:EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.

Why Does EBC Fall Short?

1. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 5.2% annually over the last five years
2. Anticipated tangible book value per share growth of 2% for the next year implies profitability will be modest
3. ROE of 2.7% reflects management’s challenges in identifying attractive investment opportunities

Eastern Bank is trading at $20.83 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than EBC.

One Small-Cap Stock to Buy:

Northern Oil and Gas (NOG)

Market Cap: $2.80 billion

Taking the path less traveled in the oil industry by choosing not to operate its own wells, Northern Oil and Gas (NYSE:NOG) acquires minority stakes in oil and gas wells operated by other companies across major U.S. shale basins.

Why Will NOG Outperform?

1. Impressive 28.9% annual revenue growth over the last ten years indicates it’s winning market share this cycle
2. Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 81%
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

At $26.81 per share, Northern Oil and Gas trades at 7.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.