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.
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.
Griffon (GFF)
Market Cap: $3.81 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?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.1% annually over the last two years
- Estimated sales for the next 12 months are flat and imply a softer demand environment
Griffon is trading at $82.26 per share, or 13.6x forward P/E. Read our free research report to see why you should think twice about including GFF in your portfolio.
Tutor Perini (TPC)
Market Cap: $4.21 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
- Performance over the past five years was negatively impacted by new share issuances as its earnings per share fell by 18.8% annually while its revenue was flat
Tutor Perini’s stock price of $79.83 implies a valuation ratio of 18x forward P/E. Check out our free in-depth research report to learn more about why TPC doesn’t pass our bar.
Insperity (NSP)
Market Cap: $1.54 billion
Pioneering the professional employer organization (PEO) industry it helped establish, Insperity (NYSE: NSP) provides human resources outsourcing services to small and medium-sized businesses, handling payroll, benefits, compliance, and HR administration.
Why Is NSP Risky?
- Muted 2.8% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Earnings per share fell by 18.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Free cash flow margin dropped by 4.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $40.85 per share, Insperity trades at 22.9x forward P/E. Dive into our free research report to see why there are better opportunities than NSP.
Stocks We Like More
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
