In this article, we will be looking into the 11 best Russell 2000 stocks that have garnered recommendations from Wall Street analysts.
Since President Trump announced new tariffs, the U.S. stock market has been steadily declining. The Wall Street Journal has estimated the loss to be around $6.6 trillion. Many large economies like China and the EU have started retaliating against these new rates, sparking a global trade war and making investors scramble to make sense of the chaos.
READ ALSO: 10 Best Low-Cost Stocks to Buy According to Billionaires.
Is this a buying opportunity or a trap? This is the question investors, market experts, and analysts are currently asking themselves. While social media is buzzing with calls to buy the dip, experts call the attempts to time the market a fool’s errand. Predicting market moves is impossible without sheer luck, and when investors make their decisions by relying on such luck, they also inherit the huge risk accompanying it. Waiting on the sidelines can be painful, too, since some experts strongly believe that the best returns follow the most significant dips. To use the opportunity, however, investors need disciplined strategies backed by valuable information regarding the market and the stocks.
Combining the strategy with credible information, we have compiled a list of the 11 best Russell small-cap stocks that income-seeking investors may be interested in buying. Though mega-cap stocks dominate the headlines, small-cap companies in the Russell index also quietly steal the spotlight. These companies, often called America’s economic backbone, are domestically focused, which prevents them from taking on the full impact of tariff crossfires. Also, thanks to their agility and growth potential, small caps have a history of outperforming large caps during early-cycle recoveries. The consecutive rate cuts by the Fed to counter recession risks this year could also favor these stocks since low borrowing cost leads to progress in the companies’ expansion plans.
Understanding their potential, Wall Street analysts are combing through the Russell small-cap companies to find valuable stocks that incorporate resilience and growth. Amidst the growing uncertainties surrounding the mid-caps and even large-caps, small-caps in the Russell index, backed by the analysts’ ratings, might prove to be a safer harbor for investors.
Hence, for investors to pepper their portfolio with the best small caps in the market, we have gone through Wall Street’s top recommendations and brought you 11 Russell small-cap stocks that analysts believe are primed to thrive in this volatile climate.
Our Methodology
We have put together our list by following a few criteria. Primarily, all the stocks we have considered for our list are small caps and part of the Russell 2000. We have filtered out those stocks that do not have a strong Buy rating from the analysts. The criteria ensured that all the picks in our list have future growth potential, benefiting income-seeking investors. The average volume has been set at 100,000 to gather stocks with strong liquidity.
Additionally, we have included only those stocks with positive earnings per share (EPS) over the past five years, which provides a historical overview of the companies’ growth. All the data in the article was taken from financial databases and analyst reports, with all information updated as of April 7, 2025. To rank the stocks, we used the hedge funds in the Insider Monkey database as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. Forestar Group Inc. (NYSE:FOR)
Upside potential: 51.73%
No of hedge funds: 16
Forestar Group Inc. (NYSE:FOR) is a residential and real estate development company focused on lot development for homebuilders. The company runs its operations primarily across the southern and southeastern United States from its headquarters in Texas. It functions as a strategic land supplier for D.R. Horton, its majority shareholder in these regions. The company takes on its competitors in the market with strong capital backing and geographic diversification. Their growth model is centered around land acquisition discipline and scalable development execution.
Despite a slow recovery after the pandemic, the real estate market notably favored the company, with a 38.51% EPS gain over five years. Delivering over 2300 lots, Forestar Group Inc. (NYSE:FOR) generated approximately $250.4 million in the first quarter of 2025. The number of owned lots has also increased nearly twice that of the previous year, reaching the highest number since 2020. Government delays are extending the cycle time at an unprecedented rate. However, significant investment in land acquisitions, with a 50% increase in the last quarter, is expected to reflect positively on the company’s revenue in 2025.
Institutional interest in Forestar Group Inc. (NYSE:FOR) stands low compared to other Russell 2000 stocks on our list, with only 16 hedge funds holding stakes. However, an upside potential of 51.73% and a Buy rating from analysts increase its appeal among investors looking to buy within the housing development segment.
10. The Brink’s Company (NYSE:BCO)
Upside potential: 50.33%
No of hedge funds: 20
The Brink’s Company (NYSE:BCO), headquartered in Virginia, is a global leader in secure logistics and cash management solutions. The company offers armored transportation, ATM servicing, vault outsourcing, and international currency logistics services. The Brink’s Company (NYSE:BCO)’s client base is comprised of financial institutions, retailers, and government agencies. With a global presence across over 100 countries, the company gains a competitive edge through scale and technology-enabled tracking systems.
With nearly 45% EPS growth in the past five years, The Brink’s Company (NYSE:BCO) has historically proven itself as one of the best Russell 2000 stocks in the secure logistics and cash management solutions market segment. Additionally, the company reported strong organic revenue growth of 12% for the full year of 2024 and 11% in Q4. They have also demonstrated strong cash generation, with $426 million in cash from operations and $400 million in free cash flow for 2024. The Brink’s Company (NYSE:BCO) incurred a $38 million charge concerning a legal resolution. However, it has cleared the legal issues with the DOJ and FinCEN, bringing the management focus to achieving 2025’s Q1 revenue guidance of $1.2 to $1.25 billion.
The Brink’s Company (NYSE:BCO) has gained a Buy rating from analysts and an attractive upside potential of 50.33%. Twenty hedge funds are backing the company, according to Insider Monkey’s Q4 2024 database, indicating moderate confidence in the stock.
9. ACM Research, Inc. (NASDAQ:ACMR)
Upside potential: 87.99%
No of hedge funds: 23
California-based company, ACM Research, Inc. (NASDAQ:ACMR) is developing and manufacturing wafer-cleaning equipment for the global semiconductor industry. The company’s proprietary Ultra-Clean technology serves front-end and advanced packaging processes with a significant foothold in Asia. ACM Research distinguishes itself from its competitors through innovative single-wafer cleaning systems optimized for advanced nodes. The company’s customization capabilities and cost efficiency appeal to leading foundries and device manufacturers, thus making it a leader in semiconductor process equipment development.
Demand for the company’s products has been high in the prior years, as indicated by the 36% growth in the EPS over the past 5 years. The performance of ACM Research, Inc. (NASDAQ:ACMR) has surpassed over 70% of its peers in the industry. With significant revenue growth, particularly in China, the company is expanding into other global markets. The company has further reduced dependency on U.S.-sourced components by successfully localizing its supply chain. For the fiscal year 2025, the company anticipates revenue between $850 million and $950 million. However, China’s high revenue concentration (99% of total revenue) may expose the stock to tariffs and tariff tension between countries.
Analysts have assigned ACM Research, Inc. (NASDAQ:ACMR) a Buy rating. Insider Monkey database noted 23 hedge funds backing the stock at the end of Q4 2024, suggesting moderate institutional confidence in the company. With an estimated upside potential of 87.99%, the company ranks on our list of best Russell 2000 stocks.
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