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. That said, here are two Russell 2000 stocks that could be the next breakout winners and one that may face some trouble.
One Stock to Sell:
Brookdale (BKD)
Market Cap: $1.49 billion
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE: BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Why Do We Think Twice About BKD?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.8% annually over the last five years
- Low returns on capital reflect management’s struggle to allocate funds effectively
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $6.36 per share, Brookdale trades at 3.3x forward EV-to-EBITDA. To fully understand why you should be careful with BKD, check out our full research report (it’s free).
Two Stocks to Watch:
Tecnoglass (TGLS)
Market Cap: $3.98 billion
The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Why Could TGLS Be a Winner?
- Market share has increased this cycle as its 17.5% annual revenue growth over the last five years was exceptional
- Excellent operating margin of 27.3% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 43.6% annually
Tecnoglass’s stock price of $84.69 implies a valuation ratio of 20.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Primoris (PRIM)
Market Cap: $3.89 billion
Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Why Do We Like PRIM?
- Market share has increased this cycle as its 16.2% annual revenue growth over the last two years was exceptional
- Demand is greater than supply as the company’s 148% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Earnings per share grew by 27% annually over the last two years, massively outpacing its peers
Primoris is trading at $72.11 per share, or 16.1x 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
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
