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.

The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are two small-cap stocks that could amplify your portfolio’s returns and one best left ignored.

One Small-Cap Stock to Sell:

Sweetgreen (SG)

Market Cap: $817.5 million

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.

Why Should You Sell SG?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience

2. 11.5 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position

3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $6.75 per share, Sweetgreen trades at 441x forward EV-to-EBITDA. To fully understand why you should be careful with SG, check out our full research report (it’s free) .

Two Small-Cap Stocks to Watch:

StepStone Group (STEP)

Market Cap: $4.24 billion

Operating as both an advisor and asset manager with over $100 billion in assets under management, StepStone Group (NASDAQ:STEP) is an investment firm that provides clients with access to private market investments across private equity, real estate, private debt, and infrastructure.

Why Is STEP Interesting?

1. Annual revenue growth of 43% over the last two years was superb and indicates its market share increased during this cycle

2. Earnings per share have massively outperformed its peers over the last two years, increasing by 41.7% annually

StepStone Group is trading at $52.86 per share, or 21.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free .

Gulfport Energy (GPOR)

Market Cap: $3.48 billion

With drilling operations focused on the Utica Shale in eastern Ohio and the SCOOP play in central Oklahoma, Gulfport Energy (NYSE:GPOR) drills for and produces natural gas from underground shale formations.

Why Are We Fans of GPOR?

1. Annual revenue growth of 7.2% over the last ten years was superb and indicates its market share increased during this cycle

2. Highly-profitable operating model results in strong unit economics and a premier gross margin of 68.6%

3. Robust free cash flow margin of 17.3% gives it many options for capital deployment