The Russell 2000 is a stock market index that comprises 2000 small and mid-cap stocks trading in the U.S. It is a solid gauge of the overall market’s performance regarding small and mid-sized companies.
Investors should use the Russell 2000 as a resource if seeking to gain exposure to high-performing smaller companies which are growing into more reputable and prominent companies.
Below are a number of stocks within the Russell 2000 index with market caps between $5 billion and $10 billion. These companies have impressed over the last year due to a number of factors. Those include the initiation of a share repurchase program, a growing customer base and record sales growth.
This makes them a strong buy for investors looking to add to their portfolio. Let’s explore these Wall Street favorites.
Modine Manufacturing (MOD)
Modine Manufacturing (NYSE:MOD) provides thermal management systems primarily for the automation and IT industries, both domestically and internationally. Its products include heat transfer coils, fluid coolers, precision air conditioning units, liquid cooling solutions and fan walls.
Over this past year, its share price has more than tripled, now standing at over $93. Due to the rising demand for cooling solutions among data centers, Modine Manufacturing acquired Scott Springfield Manufacturing, which produces air-handling units.
On May 21, Modine Manufacturing reported earnings for Q4 of 2024, which stated that gross profit increased by 21% year-over-year (YOY). MOD saw particular growth within its data center cooling segment, which reported a sales increase of 57% compared to the previous year.
Earnings fell roughly in line with analyst expectations, and revenue growth is expected to be between 5% and 10% in the fiscal year 2025. Finally, MOD has upside potential, given the rapid sales growth of its data center segment and management’s aggressive growth strategies to improve shareholder value.
Sprouts Farmers Market (SFM)
Sprouts Farmers Market (NASDAQ:SFM) is a food retail store focusing on organic and fresh products. It offers perishables, frozen food, bulk items, dairy and meats.
On May 1, SFM reported earnings for the first quarter of 2024. Total sales rose by 9% and net income increased by 50% to $114 million YOY. In Q1 of 2024, it also opened seven new store locations. On May 23, Sprout’s board of directors approved a share repurchase program of $600 million. It has $120 million remaining for its current repurchase plan.
Over the past year, its share price has increased by 135% due to impressive earnings growth overall and the expansion of store locations. Sprouts’ share price could continue to increase based on improved earnings and a growing customer base. Also, Sprouts is far outpacing its peers in share price appreciation, making it a strong buy for investors seeking to gain exposure to the consumer staples sector.
Abercrombie & Finch (ANF)
Abercrombie & Finch (NYSE:ANF) is an apparel retailer that operates under the brands of Gilly Hicks, Abercrombie & Fitch and Hollister. It sells its products primarily through its retail locations, e-commerce platform and wholesale. Over this past year, ANF’s stock has skyrocketed by over 400% due to its record earnings growth and continued positive outlook, which have impressed investors.
On May 29, Abercrombie & Fitch reported earnings results for Q1 of 2024. Total revenue increased by 22% and net income rose by more than sixfold to $115 million YOY. Also, ANF raised its financial outlook for 2024, with sales expected to increase by roughly 10% compared to 2023.
Additionally, the company’s cash and cash equivalents have nearly doubled to $864 million compared to the previous year. And double-digit sales growth was reported for its Abercrombie & Fitch and Hollister brands.
ANF is a retail company that has been performing remarkably well lately. Incredible sales generation among its brands makes it a solid buy for investors.
As of this writing, Noah Bolton did not hold (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.
