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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Beyond Meat (BYND)
Market Cap: $273.8 million
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ: BYND) is a food company specializing in alternatives to traditional meat products.
Why Do We Avoid BYND?
- Falling unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Beyond Meat is trading at $3.55 per share, or 0.9x forward price-to-sales. To fully understand why you should be careful with BYND, check out our full research report (it’s free).
Post (POST)
Market Cap: $6.21 billion
Founded in 1895, Post (NYSE: POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.
Why Is POST Not Exciting?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Free cash flow margin shrank by 1.7 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Post’s stock price of $112.87 implies a valuation ratio of 15.7x forward P/E. Check out our free in-depth research report to learn more about why POST doesn’t pass our bar.
Gates Industrial Corporation (GTES)
Market Cap: $6.14 billion
Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE: GTES) offers power transmission and fluid transfer equipment for various industries.
Why Does GTES Fall Short?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.1%
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $22.52 per share, Gates Industrial Corporation trades at 16.4x forward P/E. Read our free research report to see why you should think twice about including GTES in your portfolio.
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
