The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. That said, here are two Russell 2000 stocks that could deliver strong gains and one best left off your watchlist.
One Stock to Sell:
UFP Industries (UFPI)
Market Cap: $4.86 billion
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Do We Steer Clear of UFPI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.4% annually over the last five years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 8.3% annually, worse than its revenue
- Eroding returns on capital suggest its historical profit centers are aging
UFP Industries is trading at $88.24 per share, or 17.3x forward P/E. Dive into our free research report to see why there are better opportunities than UFPI.
Two Stocks to Watch:
Crane NXT (CXT)
Market Cap: $2.90 billion
Born from a corporate transformation completed in 2023, Crane NXT (NYSE: CXT) provides specialized technology solutions for payment processing, banknote security, and authentication systems for financial institutions and businesses.
Why Does CXT Stand Out?
- Average backlog growth of 17.1% over the past two years shows it has a steady sales pipeline that will drive future orders
- Forecasted revenue growth of 11% for the next 12 months indicates its momentum over the last two years is sustainable
- Acceptable returns on capital suggest management generated shareholder value by investing in profitable projects
Crane NXT’s stock price of $50.33 implies a valuation ratio of 11.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Noble Corporation (NE)
Market Cap: $7.21 billion
With origins dating back over a century to 1921, Noble Corporation (NYSE: NE) operates drilling rigs that oil and gas companies charter to drill wells in deep ocean waters and shallow seas.
Why Do We Watch NE?
- Impressive 29.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Revenue base of $3.07 billion gives it economies of scale and some negotiating power with suppliers
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
At $45.58 per share, Noble Corporation trades at 56.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
