The Russell 2000 (^RUT) may be overshadowed by larger indexes, but it’s full of companies with the potential to deliver high returns. A select few have the right mix of innovation, market opportunity, and execution to outperform over time.
Spotting the best opportunities in the Russell 2000 takes research, and we’re here to do the heavy lifting for you. Keeping that in mind, here are three Russell 2000 stocks that could deliver strong gains.
Limbach (LMB)
Market Cap: $939.3 million
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Should You Buy LMB?
- Annual revenue growth of 11.9% over the past two years was outstanding, reflecting market share gains this cycle
- Additional sales over the last two years increased its profitability as the 46.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 11.6 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $80.43 per share, Limbach trades at 17.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Sezzle (SEZL)
Market Cap: $2.16 billion
Founded in 2016 as an alternative to traditional credit cards for younger shoppers, Sezzle (NASDAQ: SEZL) provides a payment platform that allows consumers to split purchases into four interest-free installments over six weeks at participating retailers.
Why Are We Bullish on SEZL?
- Annual revenue growth of 68.1% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 323% over the last two years outstripped its revenue performance
Sezzle is trading at $63.68 per share, or 13.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Enova (ENVA)
Market Cap: $3.42 billion
Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE: ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.
Why Do We Love ENVA?
- Annual revenue growth of 23.8% over the last five years was superb and indicates its market share increased during this cycle
- Share buybacks catapulted its annual earnings per share growth to 38%, which outperformed its revenue gains over the last two years
- Balance sheet strength has increased this cycle as its 16.1% annual book value per share growth over the last five years was exceptional
Enova’s stock price of $136.90 implies a valuation ratio of 8.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
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