3 Russell 2000 Stocks We Keep Off Our Radar

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 are three Russell 2000 stocks that don’t make the cut and some better choices instead.

The Marzetti Company (MZTI)

Market Cap: $4.56 billion

Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ:MZTI) sells bread, dressing, and dips to the retail and food service channels.

Why Is MZTI Not Exciting?

1. Annual revenue growth of 4% over the last three years was below our standards for the consumer staples sector
2. Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its three-year trend
3. Gross margin of 23.4% is below its competitors, leaving less money to invest in areas like marketing and production facilities

At $166.04 per share, The Marzetti Company trades at 23.2x forward P/E. Dive into our free research report to see why there are better opportunities than MZTI.

Benchmark (BHE)

Market Cap: $1.60 billion

Operating as a critical behind-the-scenes partner for complex technology products since 1979, Benchmark Electronics (NYSE:BHE) provides advanced manufacturing, engineering, and technology solutions for original equipment manufacturers across aerospace, medical, industrial, and technology sectors.

Why Does BHE Give Us Pause?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.1% annually over the last two years
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.4% annually
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Benchmark is trading at $44.78 per share, or 18.5x forward P/E. Check out our free in-depth research report to learn more about why BHE doesn’t pass our bar.

Hub Group (HUBG)

Market Cap: $2.69 billion

Started with $10,000, Hub Group (NASDAQ:HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.

Why Do We Steer Clear of HUBG?

1. Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. Eroding returns on capital suggest its historical profit centers are aging

Hub Group’s stock price of $43.97 implies a valuation ratio of 22.3x forward P/E. If you’re considering HUBG for your portfolio, see our FREE research report to learn more.

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 Kadant (+351% 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.