3 Small-Cap Stocks We Keep Off Our Radar

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.

Parsons (PSN)

Market Cap: $6.13 billion

Delivering aerospace technology during the Cold War-era, Parsons (NYSE:PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.

Why Are We Cautious About PSN?

1. Annual revenue growth of 4.2% over the last two years was below our standards for the industrials sector
2. Backlog failed to grow over the past two years, suggesting the company may need to tweak its product roadmap and go-to-market strategy
3. ROIC of 7% reflects management’s challenges in identifying attractive investment opportunities

Parsons is trading at $51.36 per share, or 15.1x forward P/E. If you’re considering PSN for your portfolio, see our FREE research report to learn more.

UFP Technologies (UFPT)

Market Cap: $1.85 billion

With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ:UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.

Why Is UFPT Not Exciting?

1. Revenue base of $608.9 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Adjusted operating margin failed to increase over the last two years, indicating the company couldn’t optimize its expenses

At $262 per share, UFP Technologies trades at 24.8x forward P/E. Check out our free in-depth research report to learn more about why UFPT doesn’t pass our bar.

Calumet (CLMT)

Market Cap: $3.04 billion

With roots dating back to 1919 and facilities strategically positioned from Louisiana to Montana, Calumet (NASDAQ:CLMT) refines crude oil into specialty products like lubricating oils, solvents, and waxes used in cosmetics, batteries, and industrial applications.

Why Should You Dump CLMT?

1. Gross margin of 7.4% is below its competitors, leaving less money to invest in exploration and production
2. Cash-burning history makes us doubt the long-term viability of its business model
3. High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Calumet’s stock price of $35.84 implies a valuation ratio of 159.5x forward P/E. Read our free research report to see why you should think twice about including CLMT in your portfolio.

Stocks We Like More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.