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.
Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. That said, here are three Russell 2000 stocks that don’t make the cut and some better choices instead.
Polaris (PII)
Market Cap: $3.52 billion
Founded in 1954, Polaris (NYSE: PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.
Why Is PII Risky?
- Products and services have few die-hard fans as sales have declined by 11.9% annually over the last two years
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 5.3 percentage points over the next year
- Waning returns on capital imply its previous profit engines are losing steam
Polaris is trading at $62.58 per share, or 59.8x forward P/E. To fully understand why you should be careful with PII, check out our full research report (it’s free for active Edge members).
Rogers (ROG)
Market Cap: $1.38 billion
With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE: ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications.
Why Do We Steer Clear of ROG?
- Annual sales declines of 7% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share fell by 15.7% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Free cash flow margin shrank by 5.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Rogers’s stock price of $76.80 implies a valuation ratio of 25.3x forward P/E. If you’re considering ROG for your portfolio, see our FREE research report to learn more.
AMC Entertainment (AMC)
Market Cap: $1.11 billion
With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE: AMC) operates movie theaters primarily in the US and Europe.
Why Are We Out on AMC?
- Sales trends were unexciting over the last two years as its 1.8% annual growth was below the typical consumer discretionary company
- Cash-burning history makes us doubt the long-term viability of its business model
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $2.18 per share, AMC Entertainment trades at 1.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than AMC.
Stocks We Like More
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-micro-cap company Tecnoglass (+1,754% 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
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