1 Small-Cap Stock for Long-Term Investors and 2 We Avoid

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 be the next big thing and two best left ignored.

Two Small-Cap Stocks to Sell:

DoubleVerify (DV)

Market Cap: $1.69 billion

Using advanced analytics to evaluate over 17 billion digital ad transactions daily, DoubleVerify (NYSE:DV) provides AI-powered technology that verifies digital ads are viewable, fraud-free, brand-suitable, and displayed in the intended geographic location.

Why Do We Think Twice About DV?

1. Annual revenue growth of 14.3% over the last two years was below our standards for the software sector
2. Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
3. Efficiency has decreased over the last year as its operating margin fell by 2 percentage points

At $10.77 per share, DoubleVerify trades at 2.2x forward price-to-sales. If you’re considering DV for your portfolio, see our FREE research report to learn more.

Core Laboratories (CLB)

Market Cap: $759.8 million

With roots dating back to the first commercial oil boom, Core Laboratories (NYSE:CLB) analyzes rock and fluid samples from oil and gas reservoirs to help energy companies optimize production and recovery.

Why Should You Dump CLB?

1. Muted 1.6% annual revenue growth over the last five years shows its demand lagged behind its energy upstream and integrated energy peers
2. Revenue base of $526.5 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Gross margin of 20.7% is below its competitors, leaving less money to invest in exploration and production

Core Laboratories is trading at $16.51 per share, or 24.3x forward P/E. Read our free research report to see why you should think twice about including CLB in your portfolio.

One Small-Cap Stock to Buy:

Skyward Specialty Insurance (SKWD)

Market Cap: $2.09 billion

Founded in 2006 to serve markets where standard insurance coverage falls short, Skyward Specialty Insurance (NASDAQ:SKWD) provides customized commercial property, casualty, and health insurance solutions for underserved or specialized market niches.

Why Do We Love SKWD?

1. Strong 25.4% annualized net premiums earned expansion over the last two years shows it’s capturing market share this cycle
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 38.2% outpaced its revenue gains
3. Notable projected book value per share growth of 21.8% for the next 12 months hints at strong capital generation

Skyward Specialty Insurance’s stock price of $46.81 implies a valuation ratio of 1.7x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

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.