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. Keeping that in mind, here are two Russell 2000 stocks that could be the next big thing and one that may face some trouble.
One Stock to Sell:
Lancaster Colony (LANC)
Market Cap: $4.56 billion
Known for its frozen garlic bread and Parkerhouse rolls, Lancaster Colony (NASDAQ: LANC) sells bread, dressing, and dips to the retail and food service channels.
Why Are We Hesitant About LANC?
- 5.4% annual revenue growth over the last three years was slower than its consumer staples peers
- Revenue base of $1.89 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Estimated sales growth of 1.7% for the next 12 months implies demand will slow from its three-year trend
Lancaster Colony is trading at $165.48 per share, or 23.4x forward P/E. Dive into our free research report to see why there are better opportunities than LANC.
Two Stocks to Buy:
Chart (GTLS)
Market Cap: $7.89 billion
Installing the first bulk Co2 tank for McDonalds’s sodas, Chart (NYSE: GTLS) provides equipment to store and transport gasses.
Why Are We Bullish on GTLS?
- Sales pipeline is in good shape as its backlog averaged 41.6% growth over the past two years
- Operating margin improvement of 7.3 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings per share grew by 35% annually over the last two years and trumped its peers
At $172.71 per share, Chart trades at 13.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Bloom Energy (BE)
Market Cap: $4.70 billion
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Are We Backing BE?
- Annual revenue growth of 14.5% over the last five years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 74.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow turned positive over the last five years, showing the company has crossed a key inflection point
Bloom Energy’s stock price of $20.28 implies a valuation ratio of 45.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
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 6 Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
