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 the next big thing and two that may struggle to keep up.
Two Stocks to Sell:
Smith & Wesson (SWBI)
Market Cap: $651.8 million
With a history dating back to 1852, Smith & Wesson (NASDAQ: SWBI) is a firearms manufacturer known for its handguns and rifles.
Why Do We Avoid SWBI?
- Annual revenue declines of 13.1% over the last five years indicate problems with its market positioning
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.2% for the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Smith & Wesson is trading at $15.21 per share, or 47.5x forward P/E. Dive into our free research report to see why there are better opportunities than SWBI.
LeMaitre (LMAT)
Market Cap: $2.11 billion
Founded in 1983 and named after a pioneering vascular surgeon, LeMaitre Vascular (NASDAQGM:LMAT) develops and manufactures specialized medical devices used by vascular surgeons to treat peripheral vascular disease and other circulatory conditions.
Why Do We Think Twice About LMAT?
- Revenue base of $256.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
At $95.54 per share, LeMaitre trades at 30.5x forward P/E. Read our free research report to see why you should think twice about including LMAT in your portfolio.
One Stock to Watch:
FTAI Infrastructure (FIP)
Market Cap: $564.8 million
Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ: FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors.
Why Could FIP Be a Winner?
- Impressive 35% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Notable projected revenue growth of 19.6% for the next 12 months hints at market share gains
FTAI Infrastructure’s stock price of $4.99 implies a valuation ratio of 13.4x forward EV-to-EBITDA. Is now a good time to buy? See for yourself 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.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
