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.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. Keeping that in mind, here is one Russell 2000 stock that could be a breakout winner and two that may struggle to keep up.
Two Stocks to Sell:
Lindsay (LNN)
Market Cap: $1.19 billion
A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE: LNN) provides a variety of proprietary water management and road infrastructure products and services.
Why Does LNN Worry Us?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Earnings per share lagged its peers over the last two years as they only grew by 1.7% annually
Lindsay’s stock price of $110.06 implies a valuation ratio of 18.5x forward P/E. Check out our free in-depth research report to learn more about why LNN doesn’t pass our bar.
Fluence Energy (FLNC)
Market Cap: $2.35 billion
Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ: FLNC) helps store renewable energy sources with battery systems.
Why Do We Think Twice About FLNC?
- Gross margin of 7.2% reflects its high production costs
- Free cash flow margin shrank by 6.4 percentage points over the last five years, suggesting the company stepped up its investments to maintain its competitive edge
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Fluence Energy is trading at $17.89 per share, or 58.6x forward EV-to-EBITDA. If you’re considering FLNC for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
BancFirst (BANF)
Market Cap: $3.70 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 Do We Watch BANF?
- 8.7% annual revenue growth over the last five years surpassed the sector average as its loans resonated with customers
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 15% over the last five years outstripped its revenue performance
- Annual tangible book value per share growth of 11.8% over the past five years was outstanding, reflecting strong capital accumulation this cycle
At $111.15 per share, BancFirst trades at 2x forward P/B. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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