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 are three Russell 2000 stocks that don’t make the cut and some better choices instead.
Camping World (CWH)
Market Cap: $409.1 million
Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE:CWH) still sells RVs along with boats and general merchandise for outdoor activities.
Why Are We Out on CWH?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Earnings per share decreased by more than its revenue over the last three years, partly because it diluted shareholders
- High net-debt-to-EBITDA ratio of 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $6.37 per share, Camping World trades at 9.1x forward P/E. Dive into our free research report to see why there are better opportunities than CWH.
Griffon (GFF)
Market Cap: $4.72 billion
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Why Is GFF Not Exciting?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.4% annually over the last five years
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Earnings per share lagged its peers over the last two years as they only grew by 7% annually
Griffon’s stock price of $103.99 implies a valuation ratio of 17.8x forward P/E. To fully understand why you should be careful with GFF, check out our full research report (it’s free).
Franklin BSP Realty Trust (FBRT)
Market Cap: $670.2 million
Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE:FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.
Why Do We Steer Clear of FBRT?
- Net interest income tumbled by 2.3% annually over the last five years, showing market trends are working against it during this cycle
- Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
- Underwhelming 4.2% return on equity reflects management’s difficulties in finding profitable growth opportunities
Franklin BSP Realty Trust is trading at $7.88 per share, or 0.6x forward P/B. If you’re considering FBRT for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.