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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. That said, here are three small-cap stocks to swipe left on and some alternatives you should look into instead.

BJ's (BJRI)

Market Cap: $917.8 million

Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.

Why Should You Sell BJRI?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants

2. Gross margin of 14.3% is below its competitors, leaving less money for marketing and promotions

3. Underwhelming 0.9% return on capital reflects management’s difficulties in finding profitable growth opportunities

BJ’s stock price of $41.50 implies a valuation ratio of 23.7x forward P/E. Check out our free in-depth research report to learn more about why BJRI doesn’t pass our bar.

Great Lakes Dredge & Dock (GLDD)

Market Cap: $726.1 million

Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ:GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.

Why Do We Pass on GLDD?

1. Muted 1.8% annual revenue growth over the last five years shows its demand lagged behind its industrials peers

2. Free cash flow margin dropped by 16.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up

3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

At $10.70 per share, Great Lakes Dredge & Dock trades at 15.4x forward P/E. To fully understand why you should be careful with GLDD, check out our full research report (it’s free).

NN (NNBR)

Market Cap: $95.85 million

Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Should You Dump NNBR?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.3% annually over the last five years

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

3. Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value