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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Genesco (GCO)
Market Cap: $341.5 million
Spanning a broad range of styles, brands, and prices, Genesco (NYSE:GCO) sells footwear, apparel, and accessories through multiple brands and banners.
Why Should You Sell GCO?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- 8× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Genesco’s stock price of $32.29 implies a valuation ratio of 17x forward P/E. Check out our free in-depth research report to learn more about why GCO doesn’t pass our bar.
Brunswick (BC)
Market Cap: $4.27 billion
Formerly known as Brunswick-Balke-Collender Company, Brunswick (NYSE: BC) is a designer and manufacturer of recreational marine products, including boats, engines, and marine parts.
Why Do We Steer Clear of BC?
- Annual sales declines of 13% for the past two years show its products and services struggled to connect with the market
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 4.2% annually
- Eroding returns on capital suggest its historical profit centers are aging
Brunswick is trading at $64.89 per share, or 16.4x forward P/E. If you’re considering BC for your portfolio, see our FREE research report to learn more.
AMC Entertainment (AMC)
Market Cap: $1.44 billion
With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE:AMC) operates movie theaters primarily in the US and Europe.
Why Is AMC Risky?
- Lackluster 5.7% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $2.82 per share, AMC Entertainment trades at 2.2x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including AMC in your portfolio.
Stocks We Like More
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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
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