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.
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.
LeMaitre (LMAT)
Market Cap: $1.97 billion
Founded in 1983 and named after a pioneering vascular surgeon, LeMaitre Vascular (NASDAQGM:LMAT) develops and manufactures specialized medical devices used by vascular surgeons to treat peripheral vascular disease and other circulatory conditions.
Why Does LMAT Give Us Pause?
- Modest revenue base of $240.9 million gives it less fixed cost leverage and fewer distribution channels than larger companies
At $86.69 per share, LeMaitre trades at 33.9x forward P/E. Dive into our free research report to see why there are better opportunities than LMAT.
Kemper (KMPR)
Market Cap: $2.25 billion
Originally known as Unitrin until rebranding in 2011, Kemper (NYSE:KMPR) is an insurance holding company that provides automobile, homeowners, life, and other insurance products to individuals and businesses across the United States.
Why Do We Avoid KMPR?
- Net premiums earned contracted by 1.2% annually over the last five years, showing unfavorable market dynamics this cycle
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 11.7% annually, worse than its revenue
- Book value per share tumbled by 8.1% annually over the last five years, showing insurance sector trends are working against its favor during this cycle
Kemper’s stock price of $36.88 implies a valuation ratio of 0.8x forward P/B. Read our free research report to see why you should think twice about including KMPR in your portfolio.
Phibro Animal Health (PAHC)
Market Cap: $1.66 billion
With a portfolio of approximately 800 product lines serving farmers and veterinarians in 90 countries, Phibro Animal Health (NASDAQ:PAHC) develops, manufactures, and markets health products for livestock and companion animals, including antibacterials, vaccines, nutritional supplements, and mineral additives.
Why Are We Hesitant About PAHC?
- Revenue base of $1.46 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Estimated sales growth of 2.1% for the next 12 months implies demand will slow from its two-year trend
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.6% for the last five years
Phibro Animal Health is trading at $43.48 per share, or 14.2x forward P/E. Check out our free in-depth research report to learn more about why PAHC doesn’t pass our bar.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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.