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.
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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.
NN (NNBR)
Market Cap: $57.73 million
Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.
Why Should You Dump NNBR?
- Annual sales declines of 7.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share fell by 18.8% annually over the last five years while its revenue was flat, partly because it diluted shareholders
- Negative free cash flow raises questions about the return timeline for its investments
At $1.16 per share, NN trades at 27.9x forward P/E. Read our free research report to see why you should think twice about including NNBR in your portfolio.
Progyny (PGNY)
Market Cap: $2.20 billion
Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ:PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.
Why Does PGNY Fall Short?
- Smaller revenue base of $1.27 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- ROIC of 2.1% reflects management’s challenges in identifying attractive investment opportunities
Progyny is trading at $25.46 per share, or 14.4x forward P/E. If you’re considering PGNY for your portfolio, see our FREE research report to learn more.
Assured Guaranty (AGO)
Market Cap: $4.19 billion
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE:AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Why Do We Think AGO Will Underperform?
- 3.6% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Projected sales decline of 20.2% over the next 12 months indicates demand will continue deteriorating
- ROE of 7.8% reflects management’s challenges in identifying attractive investment opportunities
Assured Guaranty’s stock price of $90.94 implies a valuation ratio of 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than AGO.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. 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 Exlservice (+354% 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.