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.
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 is one Russell 2000 stock that could deliver strong gains and two best left off your watchlist.
Two Stocks to Sell:
MGP Ingredients (MGPI)
Market Cap: $546.8 million
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ:MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Are We Out on MGPI?
- Products have few die-hard fans as sales have declined by 8.6% annually over the last three years
- Sales are projected to tank by 12% over the next 12 months as its demand continues evaporating
- Inability to adjust its cost structure while its revenue declined over the last year led to a 18.3 percentage point drop in the company’s operating margin
At $25.58 per share, MGP Ingredients trades at 9.9x forward P/E. Read our free research report to see why you should think twice about including MGPI in your portfolio.
P10 (PX)
Market Cap: $1.08 billion
Operating as a bridge between institutional investors and hard-to-access private market opportunities, P10 (NYSE:PX) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.
Why Do We Think Twice About PX?
- Performance over the past two years shows its incremental sales were less profitable, as its 7.1% annual earnings per share growth trailed its revenue gains
- Underwhelming 5.8% return on equity reflects management’s difficulties in finding profitable growth opportunities
P10 is trading at $9.85 per share, or 9.5x forward P/E. Dive into our free research report to see why there are better opportunities than PX.
One Stock to Buy:
Badger Meter (BMI)
Market Cap: $5.31 billion
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.
Why Are We Backing BMI?
- Market share has increased this cycle as its 16.1% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 27.3% annual growth in its earnings per share outpaced its revenue
- Robust free cash flow margin of 15.5% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
Badger Meter’s stock price of $180.17 implies a valuation ratio of 33.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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-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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