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.
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 avoid and better alternatives to consider.
Tutor Perini (TPC)
Market Cap: $4.60 billion
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Why Does TPC Give Us Pause?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Gross margin of 6.7% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $89.50 per share, Tutor Perini trades at 17.6x forward P/E. If you’re considering TPC for your portfolio, see our FREE research report to learn more.
First Financial Bancorp (FFBC)
Market Cap: $3.23 billion
Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ:FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.
Why Are We Wary of FFBC?
- Annual revenue growth of 8.8% over the last two years was below our standards for the banking sector
- 8.4% annual net interest income growth over the last five years was slower than its banking peers
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 8.7% annually
First Financial Bancorp is trading at $30.75 per share, or 1x forward P/B. Read our free research report to see why you should think twice about including FFBC in your portfolio.
Fidelis Insurance (FIHL)
Market Cap: $1.81 billion
Founded in Bermuda in 2014 and designed to adapt nimbly to evolving market conditions, Fidelis Insurance (NYSE:FIHL) is a global specialty insurance and reinsurance company focused on creating value through strategic capital allocation, expert risk selection and a network of long-term underwriting partnerships.
Why Are We Cautious About FIHL?
- Efficiency has decreased over the last two years as its pre-tax profit margin fell by 45.9 percentage points
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 4.7% annually
- Muted 9.3% annual book value per share growth over the last two years shows its capital generation lagged behind its insurance peers
Fidelis Insurance’s stock price of $20.88 implies a valuation ratio of 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than FIHL.
Stocks We Like More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.