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.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here is one Russell 2000 stock that could be the next big thing and two that may face some trouble.
Two Stocks to Sell:
Atlantic Union Bankshares (AUB)
Market Cap: $5.29 billion
Tracing its roots back to 1902 when it first opened its doors in Virginia, Atlantic Union Bankshares (NYSE:AUB) is a full-service regional bank providing commercial and retail banking, wealth management, and insurance services throughout Virginia and parts of Maryland and North Carolina.
Why Are We Wary of AUB?
- Performance over the past five years shows its incremental sales were less profitable, as its 4.5% annual earnings per share growth trailed its revenue gains
- Flat tangible book value per share over the last five years suggest it must find different ways to enhance shareholder value during this cycle
- Tier one capital ratio of 9.9% is insufficient to meet regulatory requirements, increasing the probability of government intervention
Atlantic Union Bankshares is trading at $37.22 per share, or 1x forward P/B. To fully understand why you should be careful with AUB, check out our full research report (it’s free).
Franklin BSP Realty Trust (FBRT)
Market Cap: $697.3 million
Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE:FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.
Why Should You Dump FBRT?
- Flat net interest income over the last five years suggest it must find different ways to grow during this cycle
- Projected net interest income decline of 3.5% for the next 12 months points to an even tougher demand environment ahead
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
Franklin BSP Realty Trust’s stock price of $9.12 implies a valuation ratio of 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than FBRT.
One Stock to Buy:
SPX Technologies (SPXC)
Market Cap: $10.07 billion
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE:SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Should You Buy SPXC?
- Market share has increased this cycle as its 15.1% annual revenue growth over the last five years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 23.6% annually, topping its revenue gains
- Free cash flow margin jumped by 8.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $199.46 per share, SPX Technologies trades at 3.9x forward price-to-sales. Is now the right time to buy? 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.