1 Small-Cap Stock to Target This Week and 2 We Question

Barchart·06/22/2026 03:44:17

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.

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 be the next 100 bagger and two that may have trouble.

Two Small-Cap Stocks to Sell:

Power Integrations (POWI)

Market Cap: $4.33 billion

A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.

Why Should You Sell POWI?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 4.2% annually over the last five years
2. Operating margin declined by 25 percentage points over the last five years as its sales cratered
3. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 10.7% annually, worse than its revenue

Power Integrations is trading at $87.99 per share, or 59.2x forward P/E. If you’re considering POWI for your portfolio, see our FREE research report to learn more.

Hertz (HTZ)

Market Cap: $1.59 billion

Started with a dozen Model T Fords, Hertz (NASDAQ:HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.

Why Are We Out on HTZ?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 3.8% annually over the last two years
2. Waning returns on capital imply its previous profit engines are losing steam

Hertz’s stock price of $5.08 implies a valuation ratio of 0.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than HTZ.

One Small-Cap Stock to Buy:

Houlihan Lokey (HLI)

Market Cap: $9.37 billion

Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE:HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.

Why Should You Buy HLI?

1. Annual revenue growth of 16.9% over the past two years was outstanding, reflecting market share gains this cycle
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 29.7% outpaced its revenue gains
3. Annual tangible book value per share growth of 20.1% over the last two years was superb and indicates its capital strength increased during this cycle

At $140.77 per share, Houlihan Lokey trades at 17.3x forward P/E. Is now the time to initiate a position? Find out in our full 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 is 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.

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