As an investor in small-cap stocks, your main objective, besides meeting your financial goals in line with your risk tolerance, is to identify companies trading for less than what they’re worth.
There are umpteen different methods to guide your bargain hunting, with popular variants stemming from household names such as Warren Buffett, Joel Greenblatt, Guy Spier and Seth Klarman, but what they all have in common is the need for a wide-enough gap between present and future value to merit inclusion in your portfolio.
While making assumptions about the future is necessarily a blend of art and science, learning to recognize this gap, or its absence, is within reach for any investor willing to get their hands dirty and comb through press releases, financial statements and investor decks to come to a data-driven conclusion.
In the newest edition of Stockhouse’s Weekly Market Movers, I’ll take a peak at two small-cap stocks that seem to be underperforming their underlying companies’ future expectations and management’s ability to make them a reality.
Euroseas
Our first discount small-cap-stock is Euroseas, market capitalization US$443.30 million, which formed in 2005 to consolidate the container shipping interests of the Pittas family of Athens, Greece, which boasts more than 140 years of industry experience. The company’s fleet, operated on spot and period charters and through pool arrangements, includes 22 vessels, divided into 15 feeder containerships and 7 intermediate containerships, with a combined capacity of 67,494 twenty-foot equivalent units (teu).
This content has been prepared as part of a partnership with Euroseas Ltd. and EON Resources Inc., and is intended for informational purposes only.
Euroseas has quadrupled revenue over the past five years from US$53.3 million in 2020 to US$212.90 million in 2024, with operations on track for new five-year records under both metrics in 2025 through Q1 and Q2.
In response, Euroseas stock (NASDAQ:ESEA) has gained more than 3,200 per cent over the period, last trading at US$62.78, complicating the optics of calling the company a value play. However, the data does not lie.
Firstly, Aristides Pittas, Euroseas’ chairman and chief executive officer, clearly states in the Q2 news release that “we are continuing to use our share buyback program, as our shares still trade at a substantial discount to our net asset value, despite the visibility of our revenues and earnings.” Net asset value as of Q2 2025 stands at US$564.9 million or US$80.60 per share, representing US$121.6 million more than the company’s market capitalization as of September 19.
Secondly, the company’s containership orderbook is expected to more than double from 2026 to 2028, granting it a broad revenue base on which to enhance margins and profitability (see slide 11 of the Q2 investor presentation).
Tying it all together, Euroseas’ management team, with the company since inception, has experience spanning the market cycle, with controlled debt of US$229.4 million (39.1 per cent of book value) and available cash and equivalents of US$126.8 million demonstrating a commitment to responsible growth. Last month, the company announced the expansion of its fleet with two 4,300 teu containerships expected in 2028.
While uncertainty remains from U.S. tariffs still working themselves out, as well as two attacks on cargo ships in the Red Sea in July by Yemen’s Houthi rebels causing rerouting away from the Suez Canal, Euroseas’ fleet is 100 per cent booked in 2025 and already 70 per cent booked for 2026, granting Pittas confidence in maintaining profitability levels over the next year, plus an ability to respond to market volatility from a position of strength.
Simos Pariaros, Euroseas’ chief administrative officer, joined Stockhouse’s Ricki Lee to discuss the company’s latest charter contract. Watch the interview here.
EON Resources
Our second discount small-cap stock, EON Resources, market capitalization US$17.49 million, is an upstream energy producer focused on oil and natural gas in the United States’ prolific Permian Basin backed by a management team with more than 150 years of collective experience in the sector.
EON’s Grayburg-Jackson Field property, located on the Northwest Shelf of the Permian Basin in New Mexico, spans 13,700 contiguous leasehold acres including 342 producing wells, 207 injection wells and 1 water source well. A December 2024 estimate details proven reserves of 14 million barrels of oil and 2.8 billion cubic feet (cf) of natural gas, with prices standing at US$62.42 per barrel and US$2.90 per million British thermal units (MMbtu) (1 cf = 1,039 btu) as of September 19. Mapped original-oil-in-place (OOIP), which captures oil without accounting for the economics of recovery, stands at 956 million barrels.
The company believes Grayburg-Jackson could unveil 34 million additional barrels through perforations in the Grayburg and San Andres formations, plus 40 million barrels from a horizontal drilling program in the latter, bringing the total value of the property’s higher-probability commodities in the ground to more than US$5 billion.
EON’s intrinsic value climbs further up thanks to its South Justis Field property, also in New Mexico, about 100 miles away from Grayburg-Jackson, where 5,360 contiguous acres contain 208 producing and injection wells currently at work extracting 207 million barrels of OOIP.
Thanks to its robust OOIP asset, management expects to triple reserves over the next 3-4 years – according to slide 4 of the August 2025 investor presentation – while approximately doubling production from 1,000 barrels of oil per day in Q2 2025 to 2,000 barrels over the next 24 months, all in conjunction with a continuous focus on reducing costs and increasing capital efficiency (slides 9-10), giving the market strong reasons to re-rate the small-cap stock from a 52.13 per cent loss year-over-year.
Look for upward pressure on EON Resources stock (NYSEAM:EONR), last trading at US$0.47, as the company deploys proceeds from a recent capital raise into field activities at Grayburg-Jackson in Q4 2025.
Dante Caravaggio, EON Resources’ CEO, joined Brieanna McCutcheon to speak about the new funding. Watch the interview here.
Thanks for reading! I’ll see you next week for a new edition of Weekly Market Movers, where I delve into companies that sat down with Stockhouse for an interview over the past week. Here’s the most recent article, in case you missed it.
Join the discussion: Find out what investors are saying about these discount small-cap stocks on the Euroseas Ltd. and EON Resources Inc. Bullboards and make sure to explore the rest of Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein.
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