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 are two Russell 2000 stocks that could deliver strong gains and one that may struggle to keep up.
One Stock to Sell:
Allient (ALNT)
Market Cap: $912.6 million
Founded in 1962, Allient (NASDAQ: ALNT) develops and manufactures precision and specialty-controlled motion components and systems.
Why Does ALNT Give Us Pause?
- Sales tumbled by 3.2% annually over the last two years, showing market trends are working against its favor during this cycle
- Issuance of new shares over the last two years caused its earnings per share to fall by 5.7% annually, even worse than its revenue declines
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Allient’s stock price of $54 implies a valuation ratio of 22.1x forward P/E. Dive into our free research report to see why there are better opportunities than ALNT.
Two Stocks to Watch:
Impinj (PI)
Market Cap: $5.17 billion
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ: PI) is a maker of radio-frequency identification (RFID) hardware and software.
Why Is PI on Our Radar?
- Annual revenue growth of 20.2% over the last five years was superb and indicates its market share increased during this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 49.4% outpaced its revenue gains
- Free cash flow margin grew by 15.8 percentage points over the last five years, giving the company more chips to play with
At $171.73 per share, Impinj trades at 65.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Northwest Pipe (NWPX)
Market Cap: $563.3 million
Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ: NWPX) is a manufacturer of pipeline systems for water infrastructure.
Why Does NWPX Stand Out?
- Annual revenue growth of 12.5% over the past five years was outstanding, reflecting market share gains this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 19.9% exceeded its revenue gains over the last two years
- Free cash flow margin jumped by 13.7 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Northwest Pipe is trading at $58.62 per share, or 15.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our 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 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-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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