Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Russell 2000 Stocks We Steer Clear Of

SMTC Cover Image

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 three Russell 2000 stocks that don’t make the cut and some better choices instead.

Semtech (SMTC)

Market Cap: $4.37 billion

A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.

Why Do We Think SMTC Will Underperform?

  1. Persistent operating margin losses and eroding margin over the last five years point to its preference for growth over profits
  2. 6.8 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
  3. Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam

Semtech is trading at $50.91 per share, or 29.1x forward P/E. Check out our free in-depth research report to learn more about why SMTC doesn’t pass our bar.

LGI Homes (LGIH)

Market Cap: $1.51 billion

Based in Texas, LGI Homes (NASDAQ: LGIH) is a homebuilding company specializing in constructing affordable, entry-level single-family homes in desirable communities across the United States.

Why Should You Sell LGIH?

  1. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 10.4% decline in its backlog
  2. Eroding returns on capital suggest its historical profit centers are aging
  3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $66.09 per share, LGI Homes trades at 10x forward P/E. If you’re considering LGIH for your portfolio, see our FREE research report to learn more.

TriCo Bancshares (TCBK)

Market Cap: $1.39 billion

Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ: TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.

Why Are We Cautious About TCBK?

  1. Muted 5.7% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
  2. Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 28.7 basis points (100 basis points = 1 percentage point)
  3. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 8.7% annually, worse than its revenue

TriCo Bancshares’s stock price of $42.82 implies a valuation ratio of 1.1x forward P/B. Read our free research report to see why you should think twice about including TCBK in your portfolio.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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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