1 Russell 2000 Stock to Consider Right Now and 2 to Avoid
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.
The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we're here to guide you toward the right ones. That said, here is one Russell 2000 stock that could deliver strong gains and two that may face some trouble.
Market Cap: $378.8 million
Going public via SPAC in 2018, Concrete Pumping (NASDAQ:BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Why Do We Think Twice About BBCP?
Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
Earnings per share have contracted by 17% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.7 percentage points
At $7.14 per share, Concrete Pumping trades at 15.8x forward P/E. If you're considering BBCP for your portfolio, see our FREE research report to learn more.
Market Cap: $3.20 billion
With roots dating back to 1909 as a window washing company, ABM Industries (NYSE:ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.
Why Should You Dump ABM?
Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
Earnings per share were flat over the last two years while its revenue grew, showing its incremental sales were less profitable
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.9 percentage points
ABM is trading at $51.41 per share, or 13.4x forward P/E. To fully understand why you should be careful with ABM, check out our full research report (it's free).
Market Cap: $2.70 billion
Responsible for projects like nuclear facilities, AZZ (NYSE:AZZ) is a provider of metal coating and power infrastructure solutions.
Why Do We Like AZZ?
Annual revenue growth of 9.2% over the last two years beat the sector average and underscores the unique value of its offerings
Operating margin expanded by 5.7 percentage points over the last five years as it scaled and became more efficient
Incremental sales significantly boosted profitability as its annual earnings per share growth of 24% over the last two years outstripped its revenue performance
AZZ's stock price of $90.30 implies a valuation ratio of 15.5x forward P/E. Is now a good time to buy? Find out in our full research report, it's free.
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
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