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 deliver strong gains and two that may struggle to keep up.

Two Stocks to Sell:

Utz (UTZ)

Market Cap: $1.11 billion

Tracing its roots back to 1921 when Bill and Salie Utz began making potato chips in their kitchen, Utz Brands (NYSE: UTZ) offers salty snacks such as potato chips, tortilla chips, pretzels, cheese snacks, and ready-to-eat popcorn, among others.

Why Should You Dump UTZ?

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. Modest revenue base of $1.43 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Underwhelming 0.3% return on capital reflects management’s difficulties in finding profitable growth opportunities

Utz’s stock price of $13 implies a valuation ratio of 14.2x forward P/E. To fully understand why you should be careful with UTZ, check out our full research report (it’s free).

Accel Entertainment (ACEL)

Market Cap: $950.8 million

Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.

Why Is ACEL Not Exciting?

1. Demand for its offerings was relatively low as its number of video gaming terminals sold has underwhelmed
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.4%
3. Low free cash flow margin of 3.8% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

Accel Entertainment is trading at $11.28 per share, or 11.8x forward P/E. Read our free research report to see why you should think twice about including ACEL in your portfolio.

One Stock to Watch:

WSFS Financial (WSFS)

Market Cap: $3.10 billion

Founded in 1832 as Wilmington Savings Fund Society and one of the oldest banks in America still operating under its original name, WSFS Financial (NASDAQ: WSFS) operates a community banking and wealth management franchise primarily serving customers in the Mid-Atlantic region through its main subsidiary, WSFS Bank.

Why Are We Positive On WSFS?

1. Market share has increased this cycle as its 9.2% annual revenue growth over the last five years was exceptional
2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 21.8% annually, topping its revenue gains
3. Annual tangible book value per share growth of 18.6% over the last two years was superb and indicates its capital strength increased during this cycle

At $55.34 per share, WSFS Financial trades at 1.1x forward P/B. Is now a good time to buy? Find out 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 Strong Momentum 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-micro-cap company Kadant (+351% 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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