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. Keeping that in mind, here is one small-cap stock that could amplify your portfolio’s returns and two best left ignored.
Two Small-Cap Stocks to Sell:
B&G Foods (BGS)
Market Cap: $315.7 million
Started as a small grocery store in New York City, B&G Foods (NYSE: BGS) is an American packaged foods company with a diverse portfolio of more than 50 brands.
Why Do We Avoid BGS?
- Sales tumbled by 5.4% annually over the last three years, showing consumer trends are working against it
- Performance over the past three years was negatively impacted by new share issuances as its earnings per share dropped by 19.4% annually, worse than its revenue
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital on unfavorable terms if market conditions deteriorate
At $3.90 per share, B&G Foods trades at 6.5x forward P/E. Check out our free in-depth research report to learn more about why BGS doesn’t pass our bar.
Crocs (CROX)
Market Cap: $6.48 billion
Founded in 2002, Crocs (NASDAQ: CROX) sells casual footwear and is known for its iconic clog shoe.
Why Should You Dump CROX?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Crocs is trading at $130.37 per share, or 9.5x forward P/E. If you’re considering CROX for your portfolio, see our FREE research report to learn more.
One Small-Cap Stock to Buy:
Upstart (UPST)
Market Cap: $3.01 billion
Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ: UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.
Why Will UPST Outperform?
- Loan originations on its platform are soaring as they averaged 56.6% growth over the last year, enabling the company to collect more fees and expand into new markets like credit cards.
- Notable projected revenue growth of 33.8% for the next 12 months hints at market share gains
- Projected to achieve positive free cash flow next year, indicating the company is at a pivotal stage in its life
Upstart’s stock price of $31.54 implies a valuation ratio of 2.1x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
