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.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. That said, here are two Russell 2000 stocks that could be the next big thing and one that may struggle to keep up.
One Industrials Stock to Sell:
AerSale (ASLE)
Market Cap: $294.9 million
Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ: ASLE) delivers full-service support to mid-life commercial aircraft.
Why Do We Avoid ASLE?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Free cash flow margin dropped by 36.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
AerSale’s stock price of $6.56 implies a valuation ratio of 7.1x forward P/E. If you’re considering ASLE for your portfolio, see our FREE research report to learn more.
Two Industrials Stocks to Watch:
DXP (DXPE)
Market Cap: $2.60 billion
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ: DXPE) provides pumps, valves, and other industrial components.
Why Will DXPE Outperform?
- Market share has increased this cycle as its 16.8% annual revenue growth over the last five years was exceptional
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share repurchases over the last two years enabled its annual earnings per share growth of 18.3% to outpace its revenue gains
DXP is trading at $166.05 per share, or 25.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Champion Homes (SKY)
Market Cap: $4.42 billion
Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.
Why Are We Positive on SKY?
- Impressive 14.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Share buybacks catapulted its annual earnings per share growth to 20.4%, which outperformed its revenue gains over the last five years
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $84.84 per share, Champion Homes trades at 26x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
