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 is one Russell 2000 stock that could be the next big thing and two that may struggle to keep up.
Two Stocks to Sell:
First Financial Bancorp (FFBC)
Market Cap: $2.47 billion
Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ:FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.
Why Are We Wary of FFBC?
- Muted 2.5% annual revenue growth over the last two years shows its demand lagged behind its banking peers
- Net interest income trends were unexciting over the last five years as its 6.4% annual growth was below the typical banking firm
- Earnings per share were flat over the last two years while its revenue grew, showing its incremental sales were less profitable
First Financial Bancorp is trading at $24.99 per share, or 0.9x forward P/B. To fully understand why you should be careful with FFBC, check out our full research report (it’s free for active Edge members).
Flagstar Financial (FLG)
Market Cap: $5.23 billion
Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE:FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.
Why Are We Out on FLG?
- Sales tumbled by 19.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Net interest margin of 1.9% reflects its high servicing and capital costs
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 18.3% annually
At $12.55 per share, Flagstar Financial trades at 0.7x forward P/B. Read our free research report to see why you should think twice about including FLG in your portfolio.
One Stock to Buy:
Globalstar (GSAT)
Market Cap: $7.74 billion
Known for powering the emergency SOS feature in newer Apple iPhones, Globalstar (NASDAQ:GSAT) operates a network of low-earth orbit satellites that provide voice and data communications services in remote areas where traditional cellular networks don't reach.
Why Is GSAT a Top Pick?
- Impressive 15.6% annual revenue growth over the last five years indicates it’s winning market share this cycle
- GSAT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
- Improving returns on capital suggest its past investments are beginning to deliver value
Globalstar’s stock price of $61.94 implies a valuation ratio of 181.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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.