The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. That said, here is one Russell 2000 stock that could be a breakout winner and two that may struggle to keep up.
Two stocks to sell:
Pitney Bowes (PBI)
Market cap: $2.10 billion
With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.
Why Do We Think Twice About PBI?
- Sales tumbled by 12.9% annually over the last five years, showing market trends are working against it during this cycle
- Sales are projected to tank by 2.1% over the next 12 months as its demand continues evaporating
Pitney Bowes is trading at $15.52 per share, or 9.9x forward P/E. Read our free research report to see why you should think twice about including PBI in your portfolio.
Kemper (KMPR)
Market cap: $1.99 billion
Originally known as Unitrin until rebranding in 2011, Kemper (NYSE: KMPR) is an insurance holding company that provides automobile, homeowners, life, and other insurance products to individuals and businesses across the United States.
Why Are We Bearish on KMPR?
- Net premiums earned contracted by 3.3% annually over the last five years, showing unfavorable market dynamics this cycle
- Sales were less profitable over the last five years as its earnings per share fell by 14.5% annually, worse than its revenue declines
- Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 11.3% annually over the last five years
At $33.78 per share, Kemper trades at 0.9x forward P/B. To fully understand why you should be careful with KMPR, check out our full research report (it’s free).
One stock to watch:
Marqeta (MQ)
Market cap: $1.85 billion
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Why Are We Positive on MQ?
- Payment activity on its platform is soaring as its TPV growth averaged 32.5% over the last year, enabling the company to collect more fees and upsell additional services like banking
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Free cash flow margin is expected to increase by 10.9 percentage points next year, suggesting the company will have more capital to invest or return to shareholders
Marqeta’s stock price of $17.09 implies a valuation ratio of 2.6x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth 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.
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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 Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
