The outlook for Gulf Keystone Petroleum (LSE: GKP) continues to be relatively uncertain. This’s reflected in the company’s share price performance, with weak investor sentiment sending Gulf Keystone’s valuation downwards by 70% since the turn of the year. That’s despite the long-term outlook for the wider oil and gas industry improving during that time and many of Gulf Keystone’s sector peers gaining ground in recent months.

Clearly, Gulf Keystone has a highly uncertain financial future, but even if it survives the short-to-medium term, its asset base remains in a high risk location. And with geopolitical uncertainty set to remain high in Northern Iraq over the long run, Gulf Keystone may struggle to gain improved investor sentiment moving forward.

While Gulf Keystone has a sound asset base in terms of its long-term profit potential, the lack of payment for produced oil is likely to be a concern for investors for some time to come. That’s simply because the future of the region is very uncertain and while there are a number of other oil and gas stocks offering wide margins of safety, there may be better options elsewhere.

Fully valued?

Of course, other smaller companies outside of the resources sector may also hold appeal. For example, Quartix Holdings (LSE: QTX) is forecast to increase its earnings by 10% in the current year and by a further 12% next year. This rate of growth has the potential to improve investor sentiment in the stock, although following the vehicle tracking system specialist’s share price rise of 28% since the turn of the year, its shares are starting to look rather fully valued.

In fact, Quartix trades on a price-to-earnings growth (PEG) ratio of 2.2 and this indicates that further share price gains could be limited. Therefore, while the company is performing well, it may be prudent to await a lower share price before piling-in.

Watch for now

Similarly, Xeros Technology (LSE: XSG) may not be a significantly superior buying opportunity than Gulf Keystone. Certainly, it has a bright long-term future, but with the polymer bead system specialist being lossmaking in each of the last two years, it may suffer from further weak sentiment following its 18% share price fall since the turn of the year.

Of course, the latest update from the company showed that it’s definitely making progress. For example, it reported that its commercial laundry division is now installing machines at the rate of approximately one per working day, while its trials are on track within the leather processing segment. However, with a number of other smaller companies offering high levels of profitability at an enticing price, Xeros may be a stock to watch rather than buy at the present time.

With that in mind, it may be a good idea to take a closer look at this 1 Top Small-Cap Stock From The Motley Fool.

The company in question could make a real impact on your bottom line in 2016 and beyond. And in time, it could help you retire early, pay off your mortgage, or simply enjoy a more abundant lifestyle.

Click here to find out all about it - doing so is completely free and comes without any obligation.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.