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. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Casella Waste Systems (CWST)
Market Cap: $7.34 billion
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Are We Wary of CWST?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Efficiency has decreased over the last five years as its operating margin fell by 4 percentage points
- Earnings per share were flat while its revenue grew over the last two years, partly because it issued new shares
At $115.65 per share, Casella Waste Systems trades at 95.8x forward P/E. Dive into our free research report to see why there are better opportunities than CWST.
QuidelOrtho (QDEL)
Market Cap: $2.01 billion
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Should You Sell QDEL?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Free cash flow margin dropped by 28.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
QuidelOrtho is trading at $30.23 per share, or 11.6x forward P/E. Check out our free in-depth research report to learn more about why QDEL doesn’t pass our bar.
Ingram Micro (INGM)
Market Cap: $4.57 billion
Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE: INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.
Why Do We Steer Clear of INGM?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Low free cash flow margin of 0.5% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Ingram Micro’s stock price of $19 implies a valuation ratio of 6.4x forward P/E. If you’re considering INGM for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
