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Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.

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 best left ignored.

Two Small-Cap Stocks to Sell:

Silgan Holdings (SLGN)

Market Cap: $5.50 billion

Established in 1987, Silgan Holdings (NYSE:SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.

Why Are We Out on SLGN?

1. Annual sales declines of 4.4% for the past two years show its products and services struggled to connect with the market during this cycle

2. 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

3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

Silgan Holdings’s stock price of $51.47 implies a valuation ratio of 12.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than SLGN.

Azenta (AZTA)

Market Cap: $1.99 billion

Founded as a small biotech firm, Azenta (NASDAQ:AZTA) provides services for life sciences research and biopharmaceutical applications such as sample management, cold chain logistics, and storage services.

Why Do We Steer Clear of AZTA?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.5% annually over the last five years

2. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term

3. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value

Azenta is trading at $43.55 per share, or 84.4x forward price-to-earnings. Read our free research report to see why you should think twice about including AZTA in your portfolio, it’s free.

One Small-Cap Stock to Watch:

Dycom (DY)

Market Cap: $3.96 billion

Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.

Why Are We Fans of DY?

1. Impressive 11.1% annual revenue growth over the last two years indicates it’s winning market share this cycle

2. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage

3. Share buybacks catapulted its annual earnings per share growth to 29.2%, which outperformed its revenue gains over the last two years