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. That said, here are three Russell 2000 stocks that don’t make the cut and some better choices instead.
TEGNA (TGNA)
Market Cap: $3.04 billion
Spun out of Gannett in 2015, TEGNA (NYSE:TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.
Why Do We Pass on TGNA?
- Muted 1.3% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 7.9% annually
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $18.84 per share, TEGNA trades at 8.2x forward P/E. To fully understand why you should be careful with TGNA, check out our full research report (it’s free).
CNO Financial Group (CNO)
Market Cap: $3.96 billion
Rebranded from Conseco in 2010 to signal a fresh start after navigating financial challenges, CNO Financial Group (NYSE:CNO) develops and markets health insurance, annuities, and life insurance products primarily targeting middle-income pre-retirees and retirees.
Why Does CNO Worry Us?
- Stagnant net premiums earned over the last five years suggest the firm needs alternative growth strategies
- Anticipated sales growth of 3.8% for the next year implies demand will be shaky
- Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 5.7% annually over the last five years
CNO Financial Group’s stock price of $41.54 implies a valuation ratio of 1.5x forward P/B. If you’re considering CNO for your portfolio, see our FREE research report to learn more.
WSFS Financial (WSFS)
Market Cap: $3.10 billion
Founded in 1832 as Wilmington Savings Fund Society and one of the oldest banks in America still operating under its original name, WSFS Financial (NASDAQ:WSFS) operates a community banking and wealth management franchise primarily serving customers in the Mid-Atlantic region through its main subsidiary, WSFS Bank.
Why Is WSFS Not Exciting?
- Muted 9.3% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Demand is forecasted to shrink as its estimated net interest income for the next 12 months is flat
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.2% annually
WSFS Financial is trading at $56.59 per share, or 1.1x forward P/B. Check out our free in-depth research report to learn more about why WSFS doesn’t pass our bar.
Stocks We Like More
Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.