3 Small-Cap Stocks We Find Risky

Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.

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.

Saia (SAIA)

Market Cap: $6.97 billion

Pivoting its business model after realizing there was more success in delivering produce than selling it, Saia (NASDAQ:SAIA) is a provider of freight transportation solutions.

Why Are We Hesitant About SAIA?

1. Weak tons shipped over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Free cash flow margin shrank by 7.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Waning returns on capital imply its previous profit engines are losing steam

Saia is trading at $262.74 per share, or 26.7x forward P/E. To fully understand why you should be careful with SAIA, check out our full research report (it’s free for active Edge members).

Kirby (KEX)

Market Cap: $5.82 billion

Transporting goods along all U.S. coasts, Kirby (NYSE:KEX) provides inland and coastal marine transportation services.

Why Is KEX Not Exciting?

1. Muted 4.7% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. 4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Kirby’s stock price of $107.28 implies a valuation ratio of 16x forward P/E. Dive into our free research report to see why there are better opportunities than KEX.

SAIC (SAIC)

Market Cap: $4.01 billion

With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.

Why Do We Avoid SAIC?

1. Annual sales declines of 1.5% for the past two years show its products and services struggled to connect with the market during this cycle
2. Projected sales decline of 2.3% over the next 12 months indicates demand will continue deteriorating
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.5 percentage points

At $87.02 per share, SAIC trades at 10.3x forward P/E. To fully understand why you should be careful with SAIC, check out our full research report (it’s free for active Edge members).

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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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