While large-cap stocks dominate headlines, the Russell 2000 (^RUT) is where under-the-radar companies can shine. Some small caps thrive by carving out defensible niches and steadily growing their market share.
Discovering tomorrow’s winners today is tough, but that’s exactly why we created StockStory. Keeping that in mind, here are three Russell 2000 stocks that could deliver strong gains.
CSW (CSW)
Market cap: $4.81 billion
With over two centuries of combined operations manufacturing and supplying, CSW (NYSE: CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.
Why Will CSW Outperform?
- Impressive 22.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 28% annually
- Robust free cash flow margin of 15.8% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
CSW’s stock price of $295.41 implies a valuation ratio of 21.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Clover Health (CLOV)
Market cap: $2.49 billion
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Is CLOV a Good Business?
- Customer trends over the past two years show it’s maintaining a steady flow of new contracts that can potentially increase in value over time
- Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Free cash flow flipped to positive over the last five years, indicating the company has achieved financial self-sustainability
At $4.66 per share, Clover Health trades at 28.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Tidewater (TDW)
Market cap: $3.66 billion
Operating one of the world's largest fleets with over 200 vessels spanning 30 countries, Tidewater (NYSE: TDW) operates offshore service vessels that transport supplies, equipment, and workers to oil rigs and platforms.
Why Are We Bullish on TDW?
- Annual revenue growth of 30.8% over the last five years was superb and indicates its market share increased during this cycle
- EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Strong free cash flow margin of 14.7% enables it to reinvest or return capital consistently
Tidewater is trading at $73.23 per share, or 14.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
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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.
