1 Russell 2000 Stock to Target This Week and 2 We Turn Down

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.

The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we’re here to guide you toward the right ones. Keeping that in mind, here is one Russell 2000 stock that could be the next big thing and two best left off your watchlist.

Two Stocks to Sell:

Texas Capital Bank (TCBI)

Market Cap: $4.00 billion

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ:TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Why Is TCBI Not Exciting?

1. Annual net interest income growth of 2.2% over the last five years was below our standards for the banking sector
2. Net interest margin of 3.1% is well below other banks, signaling its loans aren’t very profitable
3. Earnings per share fell by 11.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable

At $88 per share, Texas Capital Bank trades at 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than TCBI.

HA Sustainable Infrastructure Capital (HASI)

Market Cap: $3.57 billion

With a proprietary "CarbonCount" metric that quantifies the environmental impact of each dollar invested, HA Sustainable Infrastructure Capital (NYSE:HASI) is an investment firm that finances and develops climate-positive infrastructure projects across renewable energy, energy efficiency, and ecological restoration.

Why Are We Cautious About HASI?

1. Incremental sales over the last five years were less profitable as its 8% annual earnings per share growth lagged its revenue gains
2. ROE of 7.8% reflects management’s challenges in identifying attractive investment opportunities
3. Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes

HA Sustainable Infrastructure Capital’s stock price of $28.80 implies a valuation ratio of 10.2x forward P/E. Read our free research report to see why you should think twice about including HASI in your portfolio.

One Stock to Watch:

Trupanion (TRUP)

Market Cap: $2.00 billion

Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion (NASDAQ:TRUP) provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.

Why Is TRUP Interesting?

1. Annual revenue growth of 16.2% over the past two years was outstanding, reflecting market share gains this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 143% annually, topping its revenue gains
3. Balance sheet strength has increased this cycle as its 15.5% annual book value per share growth over the last five years was exceptional

Trupanion is trading at $46.80 per share, or 5.8x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).

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