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.
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.
Clarus (CLAR)
Market Cap: $123.8 million
Initially a financial services business, Clarus (NASDAQ: CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.
Why Do We Pass on CLAR?
- Sales tumbled by 17.4% annually over the last two years, showing consumer trends are working against its favor
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 16.5% annually while its revenue grew
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Clarus’s stock price of $3.25 implies a valuation ratio of 8.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why CLAR doesn’t pass our bar.
Scorpio Tankers (STNG)
Market Cap: $1.94 billion
Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.
Why Are We Wary of STNG?
- Sluggish trends in its total vessels suggest customers aren’t adopting its solutions as quickly as the company hoped
- Forecasted revenue decline of 7.3% for the upcoming 12 months implies demand will fall even further
- Earnings per share have contracted by 31.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $41.12 per share, Scorpio Tankers trades at 6.4x forward P/E. Read our free research report to see why you should think twice about including STNG in your portfolio.
AMN Healthcare Services (AMN)
Market Cap: $842.3 million
With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE: AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.
Why Do We Think AMN Will Underperform?
- Declining travelers on assignment over the past two years suggest it might have to lower prices to accelerate growth
- Projected sales decline of 8.2% over the next 12 months indicates demand will continue deteriorating
- Diminishing returns on capital suggest its earlier profit pools are drying up
AMN Healthcare Services is trading at $22 per share, or 18.1x forward P/E. Dive into our free research report to see why there are better opportunities than AMN.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 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.
