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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Under Armour (UAA)
Market Cap: $2.83 billion
Founded in 1996 by a former University of Maryland football player, Under Armour (NYSE: UAA) is an apparel brand specializing in sportswear designed to improve athletic performance.
Why Do We Avoid UAA?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Under Armour’s stock price of $6.80 implies a valuation ratio of 19.5x forward P/E. Read our free research report to see why you should think twice about including UAA in your portfolio.
Apogee (APOG)
Market Cap: $856.9 million
Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ: APOG) sells architectural products and services such as high-performance glass for commercial buildings.
Why Does APOG Give Us Pause?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.8 percentage points
At $39.17 per share, Apogee trades at 9.4x forward P/E. If you’re considering APOG for your portfolio, see our FREE research report to learn more.
Triumph Financial (TFIN)
Market Cap: $1.40 billion
Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NASDAQ: TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.
Why Do We Think Twice About TFIN?
- Net interest income trends were unexciting over the last four years as its 3.4% annual growth was below the typical bank company
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 103.3 basis points (100 basis points = 1 percentage point)
- Earnings per share fell by 24.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Triumph Financial is trading at $59.18 per share, or 1.6x forward P/B. Dive into our free research report to see why there are better opportunities than TFIN.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
