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.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here is one small-cap stock that could amplify your portfolio’s returns and two best left ignored.
Two Small-Cap Stocks to Sell:
1-800-FLOWERS (FLWS)
Market Cap: $342.6 million
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
Why Is FLWS Risky?
- Annual revenue declines of 9.9% over the last two years indicate problems with its market positioning
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 18.4% annually
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
1-800-FLOWERS is trading at $5.49 per share, or 18.3x forward P/E. Dive into our free research report to see why there are better opportunities than FLWS.
Rogers (ROG)
Market Cap: $1.23 billion
With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE: ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications.
Why Do We Steer Clear of ROG?
- Sales tumbled by 1.2% annually over the last five years, showing market trends are working against its favor during this cycle
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 13.7% annually, worse than its revenue
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 12.5 percentage points
Rogers’s stock price of $66.50 implies a valuation ratio of 25.2x forward P/E. If you’re considering ROG for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
QuinStreet (QNST)
Market Cap: $885.6 million
Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ: QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.
Why Is QNST a Good Business?
- Market share has increased this cycle as its 31.4% annual revenue growth over the last two years was exceptional
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings per share grew by 103% annually over the last two years, massively outpacing its peers
At $16.38 per share, QuinStreet trades at 14.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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
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