3 Small-Cap Stocks We Think Twice About

SelfRugger

2026-03-05 15:37:18

3 Small-Cap Stocks We Think Twice About

Jabin Bastian

Thu, February 12, 2026 at 1:33 PM GMT+9 3 min read

In this article:

TWI

+2.70%

HUBG

-2.00%

CCOI

+0.57%

+4.18%

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.

Titan International (TWI)

Market Cap: $729 million

Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.

Why Do We Steer Clear of TWI?

Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.7% annually over the last two years

Sales were less profitable over the last two years as its earnings per share fell by 73.4% annually, worse than its revenue declines

Diminishing returns on capital suggest its earlier profit pools are drying up

At $10.54 per share, Titan International trades at 10.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why TWI doesn’t pass our bar.

Hub Group (HUBG)

Market Cap: $2.60 billion

Started with $10,000, Hub Group (NASDAQ:HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.

Why Do We Pass on HUBG?

Underwhelming unit sales over the past two years imply it may need to invest in improvements to get back on track

Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable

Eroding returns on capital suggest its historical profit centers are aging

Hub Group is trading at $42.57 per share, or 22.3x forward P/E. If you’re considering HUBG for your portfolio, see our FREE research report to learn more.

Cogent (CCOI)

Market Cap: $1.26 billion

Operating a massive network spanning 20,000 miles of fiber optic cable and connecting to over 3,200 buildings worldwide, Cogent Communications (NASDAQ:CCOI) provides high-speed Internet access, private network services, and data center colocation to businesses and bandwidth-intensive organizations across 54 countries.

Why Are We Wary of CCOI?

Number of total connections has disappointed over the past two years, indicating weak demand for its offerings

Waning returns on capital imply its previous profit engines are losing steam

Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

 






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Cogent’s stock price of $26.51 implies a valuation ratio of 10.6x forward EV-to-EBITDA. To fully understand why you should be careful with CCOI, check out our full research report (it’s free).

Stocks We Like More

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

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