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 be a breakout winner and two that may struggle to keep up.
Two Stocks to Sell:
Hanesbrands (HBI)
Market Cap: $2.43 billion
A classic American staple founded in 1901, Hanesbrands (NYSE: HBI) is a clothing company known for its array of basic apparel including innerwear and activewear.
Why Should You Sell HBI?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
Hanesbrands’s stock price of $6.87 implies a valuation ratio of 10.5x forward P/E. Dive into our free research report to see why there are better opportunities than HBI.
NCR Atleos (NATL)
Market Cap: $2.92 billion
Spun off from NCR Voyix in 2023 to focus exclusively on self-service banking technology, NCR Atleos (NYSE: NATL) provides self-directed banking solutions including ATM and interactive teller machine technology, software, services, and a surcharge-free ATM network for financial institutions and retailers.
Why Do We Think NATL Will Underperform?
- Muted 1.8% annual revenue growth over the last two years shows its demand lagged behind its financials peers
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 11.8% annually
At $39.72 per share, NCR Atleos trades at 8.9x forward P/E. If you’re considering NATL for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Payoneer (PAYO)
Market Cap: $2.18 billion
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Why Are We Bullish on PAYO?
- Market share has increased this cycle as its 25.6% annual revenue growth over the last five years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 266% exceeded its revenue gains over the last two years
Payoneer is trading at $6.07 per share, or 20.9x 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.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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 Tecnoglass (+1,754% 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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