While all eyes may be on the usual suspects of market hype and influence, astute investors with a contrarian streak may want to consider Russell 2000 stocks. A key benchmark for the vitality of up-and-comers, the Russell 2000 is a small-capitalization market index. Specifically, it makes up the smallest 2,000 securities listed in the Russell 3000 index.

Fundamentally, small-cap stock picks make plenty of sense for investors willing to absorb a heightened risk-reward profile. Mainly, fewer investors are willing to chase these enterprises because they’re not making headline news on The Wall Street Journal or CNBC. Further, because of their small-cap stature, they’re more prone to wild or volatile price action.

And to be sure, no one should deny that Russell 2000 stocks to watch present a much trickier narrative than your typical blue chips. That said, the latter category represent established and mature enterprises that have limited upside potential.

But Russell 2000 stocks? They’re big enough to meet minimum weight classification for the boxing match but they can pack a serious punch. Below are a handful of securities to consider.

Asbury Automotive (ABG)

At first glance, Asbury Automotive (NYSE:ABG) might seem unnecessarily risky. As an auto dealership plying its trade during a high-interest-rate environment, prospects at face value seem dim. However, since the start of the year, ABG gained over 23% of equity value. That’s a decent performance given the headwinds that it faces. Even better, it could be on the move.

To be sure, ABG isn’t a walk in the park regarding Russell 2000 stocks to watch. However, let’s look at the facts. According to investment data aggregator Gurufocus, the company prints a three-year revenue growth rate of 22.6%. That’s well above the underlying sector average growth rate of 6.1%. However, what’s really appealing here is the trailing-year revenue multiple of 0.32X. In contrast, the sector median comes in at 0.84X.

And don’t think that people won’t be buying vehicles. With the average age of passenger vehicles in the U.S. hitting a record 12.5 years in 2023, these machines will break down eventually. Also, analysts peg ABG a strong buy, making it one of the small-cap stock picks to consider.

Harmony Biosciences (HRMY)

At first glance, Harmony Biosciences (NASDAQ:HRMY) doesn’t appear anywhere close to ranking among the Russell 2000 stock winners. Since the start of the year, HRMY dropped more than 39% of equity value. So, why bother discussing this $1.88 billion dollar enterprise? Well, in the trailing one-month period, HRMY returned nearly 32% of equity value.

Fundamentally, the company specializes in rare neurological diseases that other biotechnology firms often overlook. According to Deloitte, the market value of the global neuroscience market reached $612 billion last year. Experts project that the segment could expand at a compound annual growth rate (CAGR) of 4.2% until 2026, when it may hit a valuation of $721 billion.

So far, the company is growing at a rapid pace. Nevertheless, HRMY trades at a sales multiple of only 3.61x. In contrast, the sector median comes in at 91.8x. Also, Harmony is undervalued relative to forward earnings (11.51x multiple).

Lastly, HRMY carries a moderate buy rating with a price target of $42.63, implying 33% growth. That makes it one of the top small-cap stock picks to consider.

Callon Petroleum (CPE)

Closing the discussion of Russell 2000 stocks on the riskiest of the bunch, Callon Petroleum (NYSE:CPE) nevertheless deserves a closer examination. Yes, investors will point out that CPE lost about 14% of equity value since the start of the year. That’s distracting. Even worse, in the trailing one-month period, shares tanked 12%. Still, this could be ripe for a possible comeback.

For one thing, bearish traders have speculated against Callon, which might not work out. For example, a major entity sold 500 contracts of the Dec 15 ’23 37.00 Call late last month. At the time of the transaction, the spot price of CPE was $31.81. If shares eventually move past that point, the bears might panic and cover the position. That would likely be bullish for Callon speculators.

Financially, the company represents one of the sector’s top growth plays, featuring a three-year revenue growth rate of 22%. However, it trades at a trailing-year sales multiple of 0.78x, below the sector median of 1.04x. Finally, analysts peg shares as a moderate buy with a $46.44 price target, projecting 56% upside potential.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.