The Russell 2000 index aims to track and provide exposure to small-cap U.S. equities. It is an ETF that experiences a large amount of trading volume and is great for investors looking for exposure to smaller companies without the risk of investing in small-cap companies directly.
The stocks chosen below are within the iShares Russell 2000 ETF (NYSEARCA:IWM), which tracks the Russell 2000 Index and has approximately $59 billion in assets under management and over 40 million in average daily volume. The companies below have doubled their share price over the last year, which has set them on an upward track that shouldn’t stop anytime soon.
e.l.f. Beauty (ELF)
e.l.f. Beauty (NYSE:ELF) is a business that focuses on personal care products such as cosmetics and skincare. Its brands are e.l.f. Skin, e.l.f. Cosmetics, Keys Soulcare and Well People.
On Feb. 6, ELF announced its earnings for the third quarter of 2023, in which it stated that total revenue grew by 85% and net income increased by 41% compared to the year before. ELF raised its financial outlook for the fiscal year 2024, in which net sales, adjusted EBITDA, and net income are expected to see roughly a 10% increase compared to the previous estimates.
Over the past year, its stock price has risen by 129% due to continued favorable investor sentiment and strong earnings results throughout last year. Within its most recent earnings report, e.l.f. announced that it acquired Naturium, which is a skincare company, last October for a total value of $333 million. And it has enabled e.l.f. to continue to grow its product line.
All this positive news surrounding ELF and the fact that it is a massive player within the personal care industry make it a no-brainer as an investment addition, especially for individuals looking for more exposure in the industry.
Ardelyx (ARDX)
Ardelyx (NASDAQ:ARDX) is a biopharmaceutical business that develops oral medication to treat irritable bowel syndrome and chronic kidney disease (CKD).
On Oct. 31, Ardelyx reported earnings for the third quarter, stating that its total revenue for Q3 2022 was $5 million. For Q3 2023, it was $56 million, a very large spike primarily resulting from increased sales of one of its flagship medications, Ibsrela, which helps treat irritable bowel syndrome. ARDX reported a net loss of $23 million for Q3 2022; for Q3 2023, it was a net income of $7 million.
Throughout this year, Ardelyx has released consistent positive news regarding the improving financial state of the company. Most notably, on Jan. 8, ARDX announced that it expects its medication Ibsrela to garner more than $1 billion in revenue for 2024 compared to 2023, which was the first full year of Ibsrela’s rollout, which is only projected to bring $80 million. Ardelyx also mentioned that its oral medication to treat chronic kidney disease, Xphozah, was recently approved by the FDA late last year and has seen positive feedback.
Following the report regarding the improved sales projection for Ibsrela, ARDX’s stock price surged by nearly 50%. And also following the initial response to its recently approved medication, Xphozah. Ardelyx is a solid growth option for investors looking for exposure to the biotech industry.
Modine Manufacturing (MOD)
Modine Manufacturing (NYSE:MOD) manufactures heat transfer technology for a wide range of vehicle applications, HVAC systems and other commercial purposes.
Modine has seen its share price nearly triple within the last year mainly due to improved financial results and that there has been a restructuring of the MOD’s business model brought upon by management, which has primarily involved providing its customer base with more complex services as well as bringing more focus on maximizing growth within the areas of data centers and EV development.
On Jan. 30, Modine reported its earnings results for the third quarter of 2023, in which it stated that net income grew by 83% and total sales remained practically unchanged from the year before. It reported slightly negative free cash flow for Q3 2022; for Q3 2023, free cash flow totaled approximately $47 million. Modine revised its net sales outlook for the fiscal year 2024 to reflect weakening demand for heat transfer products but increased its adjusted EBITDA outlook for 2024.
Modine Manufacturing is a stock that hit an all-time high after its last earnings report. And with the positive results regarding its new business model. MOD has performed exceptionally well over the past year and is expected to keep its unstoppable trajectory in the future.
As of this writing, Noah Bolton held a LONG position in MOD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
