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 two small-cap stocks that could be the next 100 baggers and one best left ignored.
Market Cap: $458.6 million
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.
Why Do We Steer Clear of PLAY?
Lagging same-st…
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 two small-cap stocks that could be the next 100 baggers and one best left ignored.
Market Cap: $458.6 million
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.
Why Do We Steer Clear of PLAY?
Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand 1.
Cash-burning tendencies make us wonder if it can sustainably generate shareholder value 1.
Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Dave & Buster’s is trading at $13.45 per share, or 11.4x forward P/E. To fully understand why you should be careful with PLAY, check out our full research report (it’s free for active Edge members).
Market Cap: $1.28 billion
With roots dating back to 1993 and a name reflecting its original Quad Cities market, QCR Holdings (NASDAQGM:QCRH) operates four community banks across Iowa and Missouri, providing commercial, consumer banking, and trust services to businesses and individuals.
Why Is QCRH a Top Pick?
Productivity and efficiency ratio profits are expected to increase next year as some fixed cost leverage kicks in 1.
Incremental sales significantly boosted profitability as its annual earnings per share growth of 14.6% over the last five years outstripped its revenue performance 1.
Annual tangible book value per share growth of 12.6% over the past five years was outstanding, reflecting strong capital accumulation this cycle
QCR Holdings’s stock price of $76.28 implies a valuation ratio of 1.1x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Market Cap: $7.91 billion
Tracing its roots back to 1868 when it was founded during Texas’s post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE:CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.