3 Small-Cap Stocks Walking a Fine Line

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.

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.

AMC Networks (AMCX)

Market Cap: $309.8 million

Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ:AMCX) is a broadcaster producing a diverse range of television shows and movies.

Why Is AMCX Risky?

1. Products and services aren't resonating with the market as its revenue declined by 4.6% annually over the last five years
2. Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 3.6 percentage points over the next year
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

AMC Networks is trading at $7.19 per share, or 2x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than AMCX.

Mattel (MAT)

Market Cap: $7.00 billion

Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ:MAT) is a global children's entertainment company specializing in the design and production of consumer products.

Why Are We Out on MAT?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Estimated sales growth of 1.8% for the next 12 months is soft and implies weaker demand
3. Waning returns on capital imply its previous profit engines are losing steam

At $21.45 per share, Mattel trades at 13.7x forward price-to-earnings. To fully understand why you should be careful with MAT, check out our full research report (it’s free).

Blink Charging (BLNK)

Market Cap: $102.2 million

One of the first EV charging companies to go public, Blink Charging (NASDAQ:BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.

Why Does BLNK Give Us Pause?

1. Earnings per share fell by 11.3% annually over the last five years while its revenue grew, partly because it diluted shareholders
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Blink Charging’s stock price of $1.02 implies a valuation ratio of 0.7x forward price-to-sales. If you’re considering BLNK for your portfolio, see our FREE research report to learn more.

Stocks We Like More

With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.

Put yourself in the driver’s seat 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 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 Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.