There's something deliciously ironic about a publicly traded company that acts as though it's anti-establishment. Nobody can reliably serve two masters. With a go-against-the-grain image and growth-hungry shareholders, Volcom (NASDAQ:VLCM) seems to be setting itself up for a clash of epic proportions.

Priced at some 30 times earnings, the market is clearly expecting significant growth from the clothing retailer. At the same time, the larger it gets, the tougher it will be for the company to keep up the pace. A general rule about any given counterculture company is that the larger it gets, the more mainstream it becomes. Yet the more mainstream it becomes, the less it appeals to the "rebels" who fueled its initial growth. That makes its anti-establishment marketing seem more kitschy than real, and that potentially turns past growth into future shrinkage.

History still repeats itself
Problems like that aren't really unique to Volcom. The trendy youth-clothing market is, was, and always will be faddish. Abercrombie & Fitch (NYSE:ANF), Gap (NYSE:GPS), and American Eagle Outfitters (NASDAQ:AEOS) have all been anything but steady performers over their existence. Why should Volcom be any better at getting and staying ahead of trends than those others?

Volcom is focused on skateboard, surfboard, and snowboard enthusiasts, and that specialization might help it keep better attuned to its customers. At the same time, though, that tight focus could also spell trouble for the company's long-term growth strategy. It's a tough quandary to be in, and it's one that the company will have to tackle successfully if it wants to legitimately justify its current valuation.

Then there's the company's other business line -- a record label called "Volcom Entertainment." I suppose there's money to be made in producing and sponsoring musicians, but last I heard, the recording industry claims it's suffering at the hands of Internet pirates illegally downloading music. Why would this tiny label think it could fare better than a giant like Warner Music Group (NYSE:WMG) when it comes to fending off theft?

Of course, every generation of anti-establishment thinking brings its own breed of music with it. Perhaps Volcom, with its finger currently on the pulse of the modern rebels, simply sees a cross-selling opportunity by offering clothing and tunes from one convenient provider. As an unrepentant capitalist, I applaud that idea. It does, however, sound an awful lot like establishment thinking.

In any event, it's certainly dangerous ground to tread. That's especially true if you consider the recent remarks from Steve Jobs, CEO of giant online music retailer Apple (NASDAQ:AAPL), on eliminating digital rights management. If whatever copy protection is currently in place goes out the window, then the odds are that Volcom's already small label would get even smaller -- in revenue terms, at least.

Wait for your perfect pitch
Still, I can see the attraction in wanting to own a piece of Volcom. It's small, still growing, and profitable. It's focused on a customer base with enough disposable income to partake in what can be fairly expensive sports. And best of all, its balance sheet looks pristine. Yet none of that alters the rapidly changing, fad-driven nature of the youth-clothing market.

The time to buy such a company is when things look their worst. Such an opportunity struck last fall, when Volcom distributor Pacific Sunwear (NASDAQ:PSUN) stumbled and took Volcom's stock down with it. Such is the peril -- and the opportunity -- in small-capitalization stocks. Since Volcom is a smaller company, what could have been a minor hiccup at a large business appeared much worse to it. That spooked the market and gave investors the chance to buy at a discount.

The odds are pretty good that something else will likely come along again to knock Volcom's shares for a loop. Perhaps another distributor problem, the perception of a changing customer fad, or the elimination of digital music rights management. When that happens, opportunity will knock. Otherwise, I view Volcom as a company worth watching but not one that I'm yet ready to buy with my own cash.

Volcom is a Motley Fool Hidden Gems pick. To see what other sparkling stocks have been selected in our small-cap service, take a free 30-day trial today.

Pacific Sunwear is a Stock Advisor pick.

Fool contributor Chuck Saletta once raged against the establishment, but now he prefers to own it, instead -- it pays better. However, at the time of publication, he did not own shares of any establishment mentioned in this article. The Fool has a disclosure policy.