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. That said, here are three small-cap stocks to avoid and some other investments you should consider instead.
Market Cap: $417.4 million
Specializing in local media coverage, Gray Television (NYSE:GTN) is a broadcast company supplying digital media to various markets in the United States.
Why Do We Pass on GTN?
Gray Television is trading at $4.30 per share, or 0.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than GTN.
Market Cap: $8.36 billion
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE:NCLH) is a premier global cruise company.
Why Do We Avoid NCLH?
Norwegian Cruise Line’s stock price of $19.01 implies a valuation ratio of 9.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why NCLH doesn’t pass our bar.
Market Cap: $3.55 billion
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE:ATGE) is a global provider of workforce solutions and educational services.
Why Are We Cautious About ATGE?
At $94.61 per share, Adtalem trades at 15.3x forward price-to-earnings. If you’re considering ATGE for your portfolio, see our FREE research report to learn more.
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
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