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 is one Russell 2000 stock that could be a breakout winner and two best left off your watchlist.

Two Stocks to Sell:

RE/MAX (RMAX)

Market Cap: $154 million

Short for Real Estate Maximums, RE/MAX (NYSE: RMAX) operates a real estate franchise network spanning over 100 countries and territories.

Why Do We Avoid RMAX?

1. Sluggish trends in its agents suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Earnings per share fell by 6.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Low returns on capital reflect management’s struggle to allocate funds effectively

RE/MAX is trading at $7.55 per share, or 5.8x forward P/E. To fully understand why you should be careful with RMAX, check out our full research report (it’s free).

Northwest Bancshares (NWBI)

Market Cap: $1.50 billion

Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ: NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.

Why Does NWBI Worry Us?

1. Annual net interest income growth of 5.9% over the last five years was below our standards for the bank sector
2. Capital trends were unexciting over the last five years as its 2.3% annual tangible book value per share growth was below the typical bank company
3. Estimated tangible book value per share decline of 4.2% for the next 12 months implies a challenging profitability environment

At $11.95 per share, Northwest Bancshares trades at 0.9x forward P/B. If you’re considering NWBI for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Customers Bancorp (CUBI)

Market Cap: $2.01 billion

Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp (NYSE: CUBI) is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.

Why Are We Backing CUBI?

1. Annual net interest income growth of 14.7% over the past five years was outstanding, reflecting market share gains this cycle
2. Additional sales over the last five years increased its profitability as the 20.7% annual growth in its earnings per share outpaced its revenue
3. Balance sheet strength has increased this cycle as its 18% annual tangible book value per share growth over the last five years was exceptional

Customers Bancorp’s stock price of $63.75 implies a valuation ratio of 1.1x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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