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. Keeping that in mind, here are two Russell 2000 stocks that could deliver strong gains and one best left off your watchlist.
One Stock to Sell:
Latham (SWIM)
Market Cap: $734.1 million
Started as a family business, Latham (NASDAQ: SWIM) is a global designer and manufacturer of in-ground residential swimming pools and related products.
Why Do We Pass on SWIM?
- Sales were flat over the last five years, indicating it’s failed to expand its business
- Projected 8.3 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Rising returns on capital show management is making relatively better investments
Latham’s stock price of $6.26 implies a valuation ratio of 24.4x forward P/E. Check out our free in-depth research report to learn more about why SWIM doesn’t pass our bar.
Two Stocks to Watch:
Gulfport Energy (GPOR)
Market Cap: $2.85 billion
With drilling operations focused on the Utica Shale in eastern Ohio and the SCOOP play in central Oklahoma, Gulfport Energy (NYSE: GPOR) drills for and produces natural gas from underground shale formations.
Why Do We Like GPOR?
- Market share has increased this cycle as its 10.8% annual revenue growth over the last ten years was exceptional
- Highly-profitable operating model results in strong unit economics and a top-tier gross margin of 70.9%
- GPOR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Gulfport Energy is trading at $155.13 per share, or 6.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Vitesse Energy (VTS)
Market Cap: $747.4 million
Taking a hands-off approach to energy production, Vitesse Energy (NYSE: VTS) owns non-operated stakes in oil and natural gas wells primarily in North Dakota and Montana's Williston Basin.
Why Is VTS a Top Pick?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 14.9% annual sales growth over the last five years
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 80.2%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $17.75 per share, Vitesse Energy trades at 2.4x forward price-to-sales. 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
