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 is one Russell 2000 stock that could be a breakout winner and two best left off your watchlist.
Two stocks to sell:
BancFirst (BANF)
Market cap: $3.76 billion
Operating as a "super community bank" with a decentralized management approach that emphasizes local responsiveness, BancFirst Corporation (NASDAQ: BANF) operates as a financial holding company providing commercial banking services to retail customers and small to medium-sized businesses primarily in Oklahoma and Texas.
Why Does BANF Give Us Pause?
- Annual revenue growth of 8.9% over the last five years was below our standards for the banking sector
- Efficiency ratio is anticipated to remain the same over the next year, suggesting its fixed cost leverage is currently maxed out
- Estimated tangible book value per share growth of 9.1% for the next 12 months implies profitability will slow from its two-year trend
BancFirst is trading at $113.09 per share, or 1.9x forward P/B. Dive into our free research report to see why there are better opportunities than BANF.
Bristow Group (VTOL)
Market cap: $1.20 billion
Operating what's essentially an airborne taxi service for some of the world's most remote workplaces, Bristow Group (NYSE: VTOL) operates helicopters that transport workers to offshore oil and gas platforms and conduct search and rescue operations.
Why Do We Pass on VTOL?
- Muted 6.8% annual revenue growth over the last five years shows its demand lagged behind its energy upstream and integrated energy peers
- Revenue base of $1.62 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Low free cash flow margin of 0.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $40.73 per share, Bristow Group trades at 5.2x forward EV-to-EBITDA. To fully understand why you should be careful with VTOL, check out our full research report (it’s free).
One stock to buy:
Construction Partners (ROAD)
Market cap: $5.46 billion
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Are We Bullish on ROAD?
- Impressive 40.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 43.7% outpaced its revenue gains
- Free cash flow margin increased by 8.8 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Construction Partners’s stock price of $94.48 implies a valuation ratio of 27.8x 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.
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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
