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 swipe left on and some alternatives you should look into instead.
Molson Coors (TAP)
Market Cap: $7.69 billion
Sporting an impressive roster of iconic beer brands, Molson Coors (NYSE: TAP) is a global brewing giant with a rich history dating back more than two centuries.
Why Should You Sell TAP?
- Shrinking unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 34.6 percentage points
- ROIC of 0.6% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
Molson Coors’s stock price of $39.04 implies a valuation ratio of 8.3x forward P/E. If you’re considering TAP for your portfolio, see our FREE research report to learn more.
Radian Group (RDN)
Market Cap: $4.54 billion
Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.
Why Is RDN Not Exciting?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Net premiums earned plateaued over the last five years, signaling weak incremental demand for its insurance policies
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6.2% annually
Radian Group is trading at $37.67 per share, or 1x forward P/B. Check out our free in-depth research report to learn more about why RDN doesn’t pass our bar.
Banner Bank (BANR)
Market Cap: $2.27 billion
Founded in 1890 in Walla Walla, Washington, and evolving through more than a century of economic cycles, Banner Corporation (NASDAQ: BANR) operates Banner Bank, providing commercial banking services, loans, and financial products to individuals and businesses across Washington, Oregon, California, Idaho, and Utah.
Why Are We Cautious About BANR?
- 3.1% annual revenue growth over the last five years was slower than its banking peers
- 4.5% annual net interest income growth over the last five years was slower than its banking peers
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 6.4% annually
At $67.85 per share, Banner Bank trades at 1.1x forward P/B. Read our free research report to see why you should think twice about including BANR in your portfolio.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
