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 be a breakout winner and two best left off your watchlist.

Two Stocks to Sell:

Hain Celestial (HAIN)

Market Cap: $108.7 million

Sold in over 75 countries around the world, Hain Celestial (NASDAQ: HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.

Why Do We Steer Clear of HAIN?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 61.4% annually, worse than its revenue
3. High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $1.21 per share, Hain Celestial trades at 7.7x forward P/E. To fully understand why you should be careful with HAIN, check out our full research report (it’s free for active Edge members).

Genco (GNK)

Market Cap: $731.2 million

Headquartered in NYC, Genco (NYSE: GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.

Why Should You Dump GNK?

1. Performance surrounding its owned vessels has lagged its peers
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. 23.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Genco’s stock price of $16.91 implies a valuation ratio of 13.3x forward P/E. If you’re considering GNK for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Moelis (MC)

Market Cap: $4.73 billion

Founded in 2007 by veteran banker Ken Moelis during the lead-up to the financial crisis, Moelis & Company (NYSE: MC) is an independent investment bank that provides strategic and financial advisory services to corporations, financial sponsors, governments, and sovereign wealth funds.

Why Are We Bullish on MC?

1. Impressive 32.5% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Additional sales over the last two years increased its profitability as the 299% annual growth in its earnings per share outpaced its revenue
3. Stellar return on equity showcases management’s ability to surface highly profitable business ventures

Moelis is trading at $63.91 per share, or 21x 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.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound 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 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-small-cap company Exlservice (+354% 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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