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 three Russell 2000 stocks that don’t make the cut and some better choices instead.
Vishay Precision (VPG)
Market Cap: $453.3 million
Emerging from Vishay Intertechnology in 2010, Vishay Precision (NYSE:VPG) operates as a global provider of precision measurement and sensing technologies.
Why Do We Think VPG Will Underperform?
- Annual sales declines of 9% for the past two years show its products and services struggled to connect with the market during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 15.3% annually while its revenue grew
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Vishay Precision’s stock price of $34.14 implies a valuation ratio of 33.6x forward P/E. If you’re considering VPG for your portfolio, see our FREE research report to learn more.
Premier (PINC)
Market Cap: $2.34 billion
Operating one of the largest healthcare group purchasing organizations in the United States with over 4,350 hospital members, Premier (NASDAQ:PINC) is a technology-driven healthcare improvement company that helps hospitals, health systems, and other providers reduce costs and improve clinical outcomes.
Why Do We Avoid PINC?
- Annual sales declines of 11.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Adjusted operating margin declined by 18.8 percentage points over the last two years as its sales cratered
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
At $28.26 per share, Premier trades at 12.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than PINC.
Seacoast Banking (SBCF)
Market Cap: $3.05 billion
Founded during the Florida land boom of 1926 and surviving the Great Depression, Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is a financial holding company that provides commercial and retail banking, wealth management, and mortgage services throughout Florida.
Why Should You Dump SBCF?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Sales over the last two years were less profitable as its earnings per share fell by 1.5% annually while its revenue was flat
- Projected tangible book value per share decline of 1.8% for the next 12 months points to tough credit quality challenges ahead
Seacoast Banking is trading at $31.56 per share, or 1.1x forward P/B. To fully understand why you should be careful with SBCF, check out our full research report (it’s free for active Edge members).
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Comfort Systems (+782% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.