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.
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. Keeping that in mind, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.
Oxford Industries (OXM)
Market Cap: $966.6 million
The parent company of Tommy Bahama, Oxford Industries (NYSE:OXM) is a lifestyle fashion conglomerate with brands that embody outdoor happiness.
Why Should You Sell OXM?
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Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
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Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
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Low free cash flow margin of 6.7% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $61.11 per share, Oxford Industries trades at 8.1x forward price-to-earnings. Read our free research report to see why you should think twice about including OXM in your portfolio, it’s free .
Amdocs (DOX)
Market Cap: $10.01 billion
Powering the digital experiences of approximately 400 communications companies worldwide, Amdocs (NASDAQ:DOX) provides software and services that help telecommunications and media companies manage customer relationships, monetize services, and automate network operations.
Why Should You Dump DOX?
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Backlog growth averaged a weak 2.5% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
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Estimated sales decline of 6.6% for the next 12 months implies a challenging demand environment
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Free cash flow margin dropped by 5.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Amdocs is trading at $89.14 per share, or 12.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than DOX .
Concentrix (CNXC)
Market Cap: $2.97 billion
With a team of approximately 450,000 employees across 75 countries, Concentrix (NASDAQ:CNXC) designs and delivers customer experience solutions that help global brands manage their customer interactions across digital channels and contact centers.
Why Does CNXC Give Us Pause?
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Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
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Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat
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Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Concentrix’s stock price of $46.03 implies a valuation ratio of 3.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why CNXC doesn’t pass our bar .
Stocks We Like More
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