Investing in Russell 2000 stocks is a smart idea because it focuses on small-cap stocks with substantial growth potential. While individual stocks within the index vary, some are poised to offer significant gains. Additionally, with some expectations of easing inflation and interest rates, now may be an opportune time to find the best Russell 2000 stocks to buy for potential returns. The index provides an extensive view of smaller companies, offering investors exposure to a broader segment of the market beyond large-cap stocks, which can add to portfolio diversification and bring growth prospects.
These three companies are the three best stocks in the Russell 2000 to buy . If you want to invest in small-cap stocks, it makes more sense to choose the companies that will deliver better profits and growth rather than the entire index, which will provide slower returns. These are the three best Russell 2000 stocks to buy that can bring you those high returns.
Celsius Holdings (CELH)
Celsius Holdings (NASDAQ:CELH) develops and sells energy drinks and liquid supplements. It distributes its products through supermarkets, convenience stores, health clubs and gyms. Analysts are optimistic about the stock’s future performance and offer a median price target of $95.00, its current price is $82.07.
Celsius’s business has recently been underscored by remarkable growth, and Q1 2024 was no exception. The company reported revenue of $355.7 million, up 37% YoY. And net income of $77.8 million was up 89% YoY. In addition to being a growth success story, Celsius also has a strong balance sheet. It holds almost $880 million in cash and cash equivalents and has a debt-to-equity ratio of only 0.17.
Moreover, Celsius now holds an 11.5% market share in MULOC, up from 7.5% a year ago. Management noted in its most recent earnings report that Celsius has gained a significant amount of shelf space and market reach, a result of its strategic partnerships including Celsius’s alliance with PepsiCo.
Additionally, international expansion is a massive opportunity for Celsius. In Q1 2024, North American sales still accounted for 95% of Celsius’s revenue, but the company’s focus on global expansion could change this. Recently, Celsius announced its plans to expand its distribution to the UK, Ireland, Australia, France and New Zealand. Investors should watch its efforts to tap into these new markets.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) develops and manufactures artificial intelligence servers and storage solutions. After exploding by nearly 500% in the past year, its stock currently trades for just under $800. And analysts are still bullish. 20 analysts have a median price target of $1000.
In 2024, Super Micro Computer-delivered outstanding growth and attracted much attention. In Q3 2024, the company achieved net sales of $3.85 billion and net income of $402 million, YoY growth of 301% and 467% respectively. After delivering another record quarter, SMCI’s growth is well above its industry peers. In its earnings call, management attributed Super Micro Computer’s top-tier performance to explosive demand for its AI servers. And management also highlighted the company’s expanding market share in AI Infrastructure.
The AI Server market is forecast to grow at a CAGR of over 18% until 2032. Given Super Micro Computer’s position as a market leader, the company is poised to take advantage of this demand for specialized AI services. In its latest earnings call, Super Micro Computers underlined its commitment to remaining a top player in AI servers. They remarked on the extent to which it is upgrading its production capacity. The company is not only retrofitting its Silicon Valley facilities but is also scaling up its Taiwan and Malaysia factories, which includes acquiring new parts and additional warehouses.
Viking Therapeutics (VKTX)
Viking Therapeutics (NASDAQ:VKTX) is a biopharmaceutical company that develops drugs for metabolic and endocrine disorders. It is up an astonishing 253% YoY and has a “buy” rating from 11 Wall Street analysts.
VKTX has already begun capitalizing on the market’s growth, as shown in its Q1 2024 earnings report. The company logged $963 million in cash, cash equivalents, and short-term investments at the end of the quarter, compared to $362 million a year ago. VKTX also beat analyst forecasts for EPS by 7.14% and saw working capital jump 597.63% YoY.
The most significant catalyst behind VKTX’s growth is its promising weight loss drug, VK2735, which saw promising results from its phase 1 clinical trials. Initial data from the study indicates that the oral tablet caused a 3.3% weight loss after 28 days. Phase 2 clinical trials are slated to start later this year. If the drug receives continued success, investors can expect VKTX to capture a significant portion of the massive $90 billion weight loss market. As the company progresses towards FDA approval, expect tremendous growth for VKTX in 2024.
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
