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.
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 deliver strong gains and two best left off your watchlist.
Two Stocks to Sell:
Apogee (APOG)
Market Cap: $871.2 million
Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ: APOG) sells architectural products and services such as high-performance glass for commercial buildings.
Why Do We Think APOG Will Underperform?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Projected sales decline of 1.8% for the next 12 months points to an even tougher demand environment ahead
- Earnings per share have contracted by 12.4% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
At $40.53 per share, Apogee trades at 12.6x forward P/E. Dive into our free research report to see why there are better opportunities than APOG.
UFP Industries (UFPI)
Market Cap: $6.60 billion
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Do We Steer Clear of UFPI?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 20.4% annually, worse than its revenue
- Waning returns on capital imply its previous profit engines are losing steam
UFP Industries is trading at $113.34 per share, or 19.4x forward P/E. Read our free research report to see why you should think twice about including UFPI in your portfolio.
One Stock to Buy:
Stride (LRN)
Market Cap: $3.63 billion
Formerly known as K12, Stride (NYSE: LRN) is an education technology company providing education solutions through digital platforms.
Why Will LRN Beat the Market?
- Rapid growth in enrollments demonstrates strong market adoption
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 45% annually
- Returns on capital are climbing as management makes more lucrative bets
Stride’s stock price of $85.50 implies a valuation ratio of 10x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
