The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.
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 be a breakout winner and two that may face some trouble.
Two Stocks to Sell:
DoubleVerify (DV)
Market Cap: $1.57 billion
Using advanced analytics to evaluate over 17 billion digital ad transactions daily, DoubleVerify (NYSE: DV) provides AI-powered technology that verifies digital ads are viewable, fraud-free, brand-suitable, and displayed in the intended geographic location.
Why Should You Sell DV?
- 13.7% annual revenue growth over the last two years was slower than its software peers
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Operating margin was unchanged over the last year, suggesting it failed to gain leverage on its fixed costs
DoubleVerify’s stock price of $10.91 implies a valuation ratio of 2.1x forward price-to-sales. To fully understand why you should be careful with DV, check out our full research report (it’s free).
Custom Truck One Source (CTOS)
Market Cap: $2.44 billion
Inspired by a family gas station, Custom Truck One Source (NYSE: CTOS) is a distributor of trucks and heavy equipment.
Why Does CTOS Fall Short?
- Annual revenue growth of 4.3% over the last two years was below our standards for the industrials sector
- Earnings per share have dipped by 45.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $11.03 per share, Custom Truck One Source trades at 70.9x forward P/E. If you’re considering CTOS for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Core Natural Resources (CNR)
Market Cap: $4.54 billion
Tracing its origins to 1864 and operating some mines southwest of Pittsburgh, Core Natural Resources (NYSE: CNR) mines and exports metallurgical coal used in steelmaking and thermal coal for power generation.
Why Could CNR Be a Winner?
- Impressive 14.2% annual revenue growth over the last nine years indicates it’s winning market share this cycle
- $4.23 billion in revenue gives it scale, which leads to bargaining power with suppliers and retailers
- CNR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Core Natural Resources is trading at $77.78 per share, or 4.5x forward EV-to-EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
