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.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here is one Russell 2000 stock that could be the next big thing and two that may struggle to keep up.
Two stocks to sell:
Banner Bank (BANR)
Market cap: $2.58 billion
Founded in 1890 in Walla Walla, Washington, and evolving through more than a century of economic cycles, Banner Corporation (NASDAQ: BANR) operates Banner Bank, providing commercial banking services, loans, and financial products to individuals and businesses across Washington, Oregon, California, Idaho, and Utah.
Why Do We Think BANR Will Underperform?
- Annual revenue growth of 3.3% over the last five years was below our standards for the banking sector
- Net interest income trends were unexciting over the last five years as its 4.5% annual growth was below the typical banking firm
- Performance over the past five years shows its incremental sales were less profitable, as its 1.9% annual earnings per share growth trailed its revenue gains
Banner Bank’s stock price of $70.73 implies a valuation ratio of 1.2x forward P/B. To fully understand why you should be careful with BANR, check out our full research report (it’s free).
Golar LNG (GLNG)
Market cap: $4.66 billion
Pioneering a way to monetize stranded gas reserves that would otherwise be uneconomical to develop, Golar LNG (NASDAQ: GLNG) converts ships into floating liquefied natural gas facilities that liquefy natural gas at offshore sites.
Why Are We Hesitant About GLNG?
- Annual revenue growth of 5% over the last five years was below our standards for the energy upstream and integrated energy sector
- Costs have risen faster than its revenue over the last five years, causing its EBITDA margin to decline by 23 percentage points
- Negative free cash flow raises questions about the return timeline for its investments
Golar LNG is trading at $45.63 per share, or 39.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than GLNG.
One stock to watch:
Enpro (NPO)
Market cap: $5.99 billion
Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE: NPO) designs, manufactures, and sells products used for machinery in various industries.
Why Should NPO Be on Your Watchlist?
- Impressive 11.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 18.8% annually
- NPO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $282.41 per share, Enpro trades at 25x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
