Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
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 a breakout winner and two best left off your watchlist.
Two Stocks to Sell:
Herbalife (HLF)
Market Cap: $1.30 billion
With the first products sold out of the trunk of the founder’s car, Herbalife (NYSE:HLF) today offers a portfolio of shakes, supplements, personal care products, and weight management programs to help customers reach their nutritional and fitness goals.
Why Are We Wary of HLF?
- 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
- Anticipated sales growth of 2.1% for the next year implies demand will be shaky
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 8.3% annually
At $12.47 per share, Herbalife trades at 4.6x forward P/E. Check out our free in-depth research report to learn more about why HLF doesn’t pass our bar.
Haemonetics (HAE)
Market Cap: $4.93 billion
With roots dating back to 1971 and a mission to improve blood-related healthcare, Haemonetics (NYSE:HAE) provides specialized medical devices and software for blood collection, processing, and management across plasma centers, blood banks, and hospitals.
Why Is HAE Not Exciting?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Smaller revenue base of $1.35 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
Haemonetics is trading at $108.16 per share, or 19.3x forward P/E. If you’re considering HAE for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
JBT Marel (JBTM)
Market Cap: $5.94 billion
Tracing back to its invention of the mechanical milk bottle filler in 1884, JBT Marel (NYSE:JBTM) designs, manufactures, and sells equipment used for food processing and aviation.
Why Could JBTM Be a Winner?
- Annual revenue growth of 54.6% over the last two years was superb and indicates its market share increased during this cycle
- Solid gross margin and unit economics free up capital for marketing and product development efforts
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 30% annually
JBT Marel’s stock price of $115 implies a valuation ratio of 13.4x forward P/E. Is now the time to initiate a position? Find out in our full 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.