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.
Monro (MNRO)
Market Cap: $509.9 million
Started as a single location in Rochester, New York, Monro (NASDAQ: MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.
Why Do We Avoid MNRO?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 6 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Monro is trading at $17.01 per share, or 24.1x forward P/E. Check out our free in-depth research report to learn more about why MNRO doesn’t pass our bar.
Conagra (CAG)
Market Cap: $9.00 billion
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE: CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Do We Steer Clear of CAG?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Sales are projected to tank by 3.5% over the next 12 months as demand evaporates further
- ROIC of 5.4% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
Conagra’s stock price of $18.82 implies a valuation ratio of 7.7x forward P/E. To fully understand why you should be careful with CAG, check out our full research report (it’s free).
Perella Weinberg (PWP)
Market Cap: $1.40 billion
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ: PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Why Are We Hesitant About PWP?
- Earnings per share were flat over the last three years and fell short of the peer group average
- Negative return on equity shows management lost money while trying to expand the business
At $22.25 per share, Perella Weinberg trades at 16.4x forward P/E. Dive into our free research report to see why there are better opportunities than PWP.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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-micro-cap company Tecnoglass (+1,754% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
