Energy Recovery, Inc. ERII

Energy Recovery has gotten torched over the last six months - since March 2026, its stock price has dropped 30.1% to $7.07 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.

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.

Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the industry’s six-month return of 4.5% has fallen short of the S&P 500’s 14% rise.