3 Russell 2000 Stocks We Find Risky

The Russell 2000 (^RUT) is home to many small-cap stocks, offering investors the chance to uncover hidden gems before the broader market catches on. However, these companies often come with higher volatility and risk, as their smaller size makes them more vulnerable to economic downturns.

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 are three Russell 2000 stocks to steer clear of and some alternatives to watch instead.

Amneal (AMRX)

Market Cap: $4.60 billion

Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ:AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.

Why Do We Think Twice About AMRX?

1. Free cash flow margin shrank by 1.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
2. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Amneal’s stock price of $14.63 implies a valuation ratio of 17.4x forward P/E. Check out our free in-depth research report to learn more about why AMRX doesn’t pass our bar.

United Community Banks (UCB)

Market Cap: $4.17 billion

Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE:UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.

Why Does UCB Worry Us?

1. Muted 6% annual revenue growth over the last two years shows its demand lagged behind its banking peers
2. Performance over the past five years shows its incremental sales were less profitable, as its 6.7% annual earnings per share growth trailed its revenue gains
3. Anticipated tangible book value per share growth of 9.3% for the next year implies profitability will be modest

At $34.55 per share, United Community Banks trades at 1.1x forward P/B. If you’re considering UCB for your portfolio, see our FREE research report to learn more.

Atlantic Union Bankshares (AUB)

Market Cap: $5.71 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 Hesitant About AUB?

1. Incremental sales over the last two years were less profitable as its 6.2% annual earnings per share growth lagged its revenue gains
2. Tangible book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments
3. Insufficient tier one capital ratio of 9.9% leaves little margin for error in meeting regulatory liquidity requirements

Atlantic Union Bankshares is trading at $40.30 per share, or 1.1x forward P/B. Read our free research report to see why you should think twice about including AUB in your portfolio.

High-Quality Stocks for All Market Conditions

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 5 Strong Momentum Stocks for this week. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.