3 Small-Cap Stocks with Open Questions

September 22, 2025 at 00:33 AM EDT

PUBM Cover Image

Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

PubMatic (PUBM)

Market Cap: $394.6 million

Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ: PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.

Why Are We Out on PUBM?

Struggled to drive increased usage of its software, demonstrated by its subpar 110% net revenue retention rate
Projected sales decline of 8.5% for the next 12 months points to a tough demand environment ahead
Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 5 percentage points

PubMatic is trading at $8.55 per share, or 1.5x forward price-to-sales. Read our free research report to see why you should think twice about including PUBM in your portfolio.

Fresh Del Monte Produce (FDP)

Market Cap: $1.71 billion

Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE: FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.

Why Is FDP Risky?

Sales were flat over the last three years, indicating it’s failed to expand its business
Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 8.3%
Below-average returns on capital indicate management struggled to find compelling investment opportunities

Fresh Del Monte Produce’s stock price of $35.69 implies a valuation ratio of 15.8x forward EV-to-EBITDA. If you’re considering FDP for your portfolio, see our FREE research report to learn more.

Sinclair (SBGI)

Market Cap: $984.1 million

With over 2,400 hours of local news produced weekly and 640 broadcast channels reaching millions of American homes, Sinclair (NASDAQ: SBGI) operates a network of 185 local television stations across 86 U.S. markets, producing news programming and distributing content from major networks.

Why Should You Sell SBGI?

Sales tumbled by 9.2% annually over the last five years, showing market trends are working against its favor during this cycle
Sales were less profitable over the last five years as its earnings per share fell by 21.9% annually, worse than its revenue declines
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.2 percentage points

At $14.54 per share, Sinclair trades at 1.9x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than SBGI.

High-Quality Stocks for All Market Conditions

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Don’t let fear keep you from great opportunities and take a look at 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).

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3 Small-Cap Stocks with Open Questions

PubMatic (PUBM)

Fresh Del Monte Produce (FDP)

Sinclair (SBGI)

High-Quality Stocks for All Market Conditions

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