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.
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 breakout winners and one that may struggle to keep up.
One Stock to Sell:
Jackson Financial (JXN)
Market Cap: $7.83 billion
Spun off from British insurer Prudential plc in 2021 after more than 60 years as its U.S. subsidiary, Jackson Financial (NYSE: JXN) offers annuity products and retirement solutions that help Americans grow and protect their retirement savings and income.
Why Are We Hesitant About JXN?
- Net premiums earned expanded by 1.9% annually over the last two years, falling below our expectations for the insurance sector
- Expenses have increased as a percentage of revenue over the last two years as its pre-tax profit margin fell by 32.8 percentage points
- Earnings per share have dipped by 2.3% annually over the past four years, which is concerning because stock prices follow EPS over the long term
At $111.61 per share, Jackson Financial trades at 0.7x forward P/B. To fully understand why you should be careful with JXN, check out our full research report (it’s free).
Two Stocks to Watch:
Vita Coco (COCO)
Market Cap: $3.15 billion
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ: COCO) offers coconut water products that are a natural way to quench thirst.
Why Is COCO Interesting?
- Stellar 9.9% growth in unit sales over the past two years demonstrates the high demand for its products
- Earnings per share grew by 70.9% annually over the last three years and trumped its peers
- Industry-leading 36.9% return on capital demonstrates management’s skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
Vita Coco is trading at $53.25 per share, or 33.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Cadre (CDRE)
Market Cap: $1.74 billion
Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Why Does CDRE Stand Out?
- Annual revenue growth of 13.4% over the last two years was superb and indicates its market share increased during this cycle
- Exciting sales outlook for the upcoming 12 months calls for 16.1% growth, an acceleration from its two-year trend
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 19.9% annually
Cadre’s stock price of $42.17 implies a valuation ratio of 28.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum 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.
