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.
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. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Harley-Davidson (HOG)
Market Cap: $2.30 billion
Founded in 1903, Harley-Davidson (NYSE: HOG) is an American motorcycle manufacturer known for its heavyweight motorcycles designed for cruising on highways.
Why Do We Steer Clear of HOG?
- Number of motorcycles sold has disappointed over the past two years, indicating weak demand for its offerings
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4.4 percentage points
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Harley-Davidson is trading at $19.56 per share, or 69.5x forward P/E. Dive into our free research report to see why there are better opportunities than HOG.
Lemonade (LMND)
Market Cap: $3.96 billion
Built on the principle of giving back unused premiums to charitable causes selected by policyholders, Lemonade (NYSE: LMND) is a technology-driven insurance company that offers homeowners, renters, pet, car, and life insurance through an AI-powered digital platform.
Why Does LMND Worry Us?
- Performance over the past two years shows its incremental sales were less profitable, as its 15.8% annual earnings per share growth trailed its revenue gains
- Book value per share tumbled by 5.9% annually over the last five years, showing insurance sector trends are working against its favor during this cycle
- Negative return on equity shows that some of its growth strategies have backfired
At $52.79 per share, Lemonade trades at 8.6x forward P/B. If you’re considering LMND for your portfolio, see our FREE research report to learn more.
WesBanco (WSBC)
Market Cap: $3.39 billion
Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ: WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.
Why Are We Hesitant About WSBC?
- Muted 10% annual revenue growth over the last five years shows its demand lagged behind its banking peers
- Estimated net interest income growth of 1.9% for the next 12 months implies demand will slow from its five-year trend
- Tangible book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle
WesBanco’s stock price of $35.40 implies a valuation ratio of 0.8x forward P/B. To fully understand why you should be careful with WSBC, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
