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.

Picking the right small caps isn’t easy, and that’s exactly why StockStory exists - to help you focus on the best opportunities. Keeping that in mind, here is one Russell 2000 stock that could deliver strong gains and two that may struggle to keep up.

Two Stocks to Sell:

Rush Enterprises (RUSHA)

Market Cap: $4.25 billion

Headquartered in Texas, Rush Enterprises (NASDAQ: RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.

Why Is RUSHA Risky?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Sales are projected to tank by 3.6% over the next 12 months as demand evaporates further
3. Performance over the past two years shows each sale was less profitable, as its earnings per share fell by 12% annually

At $54.90 per share, Rush Enterprises trades at 17x forward P/E. Dive into our free research report to see why there are better opportunities than RUSHA.

Republic Bancorp (RBCAA)

Market Cap: $1.35 billion

With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.

Why Does RBCAA Fall Short?

1. Muted 9.5% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
2. Forecasted net interest income decline of 1.7% for the upcoming 12 months implies demand will fall off a cliff
3. Estimated tangible book value per share growth of 7.5% for the next 12 months implies profitability will slow from its two-year trend

Republic Bancorp’s stock price of $69.39 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including RBCAA in your portfolio.

One Stock to Watch:

Clover Health (CLOV)

Market Cap: $1.33 billion

Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.

Why Is CLOV on Our Radar?

1. Business is winning new contracts that can potentially increase in value as its customer base averaged 10.3% growth over the past two years
2. Earnings growth has massively outpaced its peers over the last four years as its EPS has compounded at 65% annually
3. Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business

Clover Health is trading at $2.62 per share, or 38x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.

Stocks We Like Even 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 9 Market-Beating Stocks. 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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