Investors looking for hidden gems should keep an eye on small-cap stocks because they’re frequently overlooked by Wall Street. Many opportunities exist in this part of the market, but it is also a high-risk, high-reward environment due to the lack of reliable analyst price targets.
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 are three small-cap stocks to swipe left on and some alternatives you should look into instead.
QuidelOrtho (QDEL)
Market Cap: $1.64 billion
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Should You Sell QDEL?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Free cash flow margin shrank by 21.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
QuidelOrtho’s stock price of $24.17 implies a valuation ratio of 10.7x forward P/E. Read our free research report to see why you should think twice about including QDEL in your portfolio.
United Community Banks (UCB)
Market Cap: $4.13 billion
Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.
Why Are We Cautious About UCB?
- 6% annual revenue growth over the last two years was slower than its banking peers
- Incremental sales over the last five years were less profitable as its 6.7% annual earnings per share growth lagged its revenue gains
- Estimated tangible book value per share growth of 9.3% for the next 12 months is soft and implies weaker profitability
United Community Banks is trading at $34.56 per share, or 1.1x forward P/B. To fully understand why you should be careful with UCB, check out our full research report (it’s free).
Butterfield Bank (NTB)
Market Cap: $2.14 billion
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Why Does NTB Worry Us?
- Net interest income trends were unexciting over the last five years as its 2.8% annual growth was below the typical banking firm
- Projected net interest income is flat for the next 12 months, implying demand will slow from its five-year trend
- Net interest margin of 2.7% is well below other banks, signaling its loans aren’t very profitable
At $52.73 per share, Butterfield Bank trades at 1.7x forward P/B. If you’re considering NTB for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
