3 Russell 2000 Stocks That Fall Short
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 are three Russell 2000 stocks to steer clear of and some alternatives to watch instead.
Power Integrations (POWI)
Market Cap: $3.05 billion
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Why Do We Avoid POWI?
Flat sales over the last five years suggest it must find different ways to grow during this cycle
Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 11.7 percentage points
Earnings per share have dipped by 3.1% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Power Integrations's stock price of $54.25 implies a valuation ratio of 31.5x forward P/E. To fully understand why you should be careful with POWI, check out our full research report (it's free).
Monarch (MCRI)
Market Cap: $1.92 billion
Established in 1993, Monarch (NASDAQ:MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Why Does MCRI Give Us Pause?
Annual revenue growth of 4% over the last two years was below our standards for the consumer discretionary sector
Demand will likely be soft over the next 12 months as Wall Street's estimates imply tepid growth of 4.4%
Monarch is trading at $104.50 per share, or 21x forward P/E. Dive into our free research report to see why there are better opportunities than MCRI.
HNI (HNI)
Market Cap: $2.37 billion
With roots dating back to 1944 and a significant acquisition of Kimball International in 2023, HNI (NYSE:HNI) manufactures and sells office furniture systems, seating, and storage solutions, as well as residential fireplaces and heating products.
Why Is HNI Not Exciting?
Muted 2.7% annual revenue growth over the last five years shows its demand lagged behind its business services peers
Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.2 percentage points
At $50.98 per share, HNI trades at 14.4x forward P/E. If you're considering HNI for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that's already erased most losses.
Don't let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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-micro-cap company Kadant (+351% 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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