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.
The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we’re here to guide you toward the right ones. Keeping that in mind, here is one Russell 2000 stock that could deliver strong gains and two that may face some trouble.
Two Stocks to Sell:
Plexus (PLXS)
Market Cap: $5.55 billion
With over 20,000 team members across 26 global facilities, Plexus (NASDAQ: PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.
Why Is PLXS Not Exciting?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Diminishing returns on capital suggest its earlier profit pools are drying up
Plexus is trading at $207.49 per share, or 26.1x forward P/E. Check out our free in-depth research report to learn more about why PLXS doesn’t pass our bar.
Great Lakes Dredge & Dock (GLDD)
Market Cap: $1.14 billion
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ: GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Why Are We Wary of GLDD?
- 2.8% annual revenue growth over the last five years was slower than its industrials peers
- Gross margin of 16.9% reflects its high production costs
- Cash burn makes us question whether it can achieve sustainable long-term growth
Great Lakes Dredge & Dock’s stock price of $17.02 implies a valuation ratio of 17.4x forward P/E. Dive into our free research report to see why there are better opportunities than GLDD.
One Stock to Watch:
Mirion (MIR)
Market Cap: $4.65 billion
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE: MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Why Should MIR Be on Your Watchlist?
- Impressive 11.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Operating margin improvement of 10.4 percentage points over the last five years demonstrates its ability to scale efficiently
- Free cash flow margin expanded by 11.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $19.00 per share, Mirion trades at 34.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
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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.
