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 are two Russell 2000 stocks that could deliver strong gains and one that may struggle to keep up.
One Stock to Sell:
Independent Bank (INDB)
Market Cap: $3.46 billion
Tracing its roots back to 1907 and serving as a financial cornerstone in New England for over a century, Independent Bank Corp. (NASDAQ: INDB) operates as the holding company for Rockland Trust, providing banking, investment, and financial services across Eastern Massachusetts and Rhode Island.
Why Do We Think Twice About INDB?
- Annual sales declines of 3.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 29.7 basis points (100 basis points = 1 percentage point)
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
At $69.31 per share, Independent Bank trades at 1x forward P/B. Check out our free in-depth research report to learn more about why INDB doesn’t pass our bar.
Two Stocks to Watch:
Brinker International (EAT)
Market Cap: $6.88 billion
Founded by Norman Brinker in Dallas, Brinker International (NYSE: EAT) is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Why Does EAT Stand Out?
- Same-store sales growth averaged 13.3% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Operating margin improvement of 4.3 percentage points over the last year demonstrates its ability to scale efficiently
- Free cash flow margin jumped by 2.6 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Brinker International is trading at $154.01 per share, or 15.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
F&G Annuities & Life (FG)
Market Cap: $4.62 billion
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE: FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
Why Is FG a Good Business?
- Net premiums earned expanded by 19.7% annually over the last two years, demonstrating exceptional market penetration this cycle
- Annual book value per share growth of 28.2% over the last two years was superb and indicates its capital strength increased during this cycle
- Exciting book value per share outlook for the upcoming 12 months calls for 50.3% growth, an acceleration from its two-year trend
F&G Annuities & Life’s stock price of $34.32 implies a valuation ratio of 1x forward P/B. Is now the right time to buy? See for yourself in our full research report, it’s free.
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-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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