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5 Russell 2000 Stocks That Have Crushed the Index in 2020
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It has been an unusual year in the stock market — one that will go down in history. From the pandemic lows in late March to a record-setting rally as the year draws to a close, 2020 has been a rollercoaster.
If we look back at 2020, the S&P 500 hit a bottom of 2,237.40 on Mar 23. Since then, it has gained 64.8%, closing at 3,687.26 on Dec 22. Few people had actually expected such a ‘fast and strong’ recovery, thanks to the liquidity in the market.
In this article, we will discuss five of the Russell 2000 companies that are among the top gainers this year.
About the Index
The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. It is one of the most widely used benchmarks for small-cap stocks because it is much broader than other indexes. This index, though very broad, composes less than 10% of the capitalization of the stock market.
The Russell 2000 Index has moved up 19.4% on a year-to-date basis. It closed at 1,989.88 on Dec 22.
Highly Volatile
Stocks in the Russell 2000 Index are relatively small, and that makes the index highly volatile. By and large, these stocks have a beta that is greater than one. High-beta stocks are supposed to be riskier but provide higher return potential. This makes it a favorite choice for aggressive investors.
5 Stocks That Hold Promise
We have selected five companies that have significantly outperformed the index so far this year. These frontrunners are well positioned to continue their winning streaks in 2021.
Nautilus, Inc. : Headquartered in Vancouver, WA, Nautilus is the global leader in innovative home fitness solutions. The company operates in two segments — Direct and Retail. Its diverse brand portfolio includes Bowflex, Nautilus, Schwinn and a broad selection of exercise bikes, cardio equipment, strength training products, as well as the JRNY digital fitness platform.
Nautilus currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of B. The company delivered a trailing four-quarter positive earnings surprise of 294%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 60.7% upward over the past 60 days. Year to date, the stock has skyrocketed 1,162% compared with 39% growth of the industry.
Trex Company, Inc. (TREX - Free Report) : Headquartered in Winchester, VA, Trex is the world’s largest manufacturer of high-performance wood-alternative decking and railing. Stocked in more than 6,700 retail locations worldwide, Trex outdoor living products offer a wide range of style options with fewer maintenance requirements than wood. The company sells its products through wholesale distributors, retail lumber dealers, and Home Depot (HD - Free Report) and Lowe's (LOW - Free Report) stores.
Trex carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter positive earnings surprise of 18.5%, on average. The consensus estimate for its next-year earnings has been revised 7.3% upward over the past 60 days. Year to date, the stock has gained 91.4% compared with 28.8% growth of the industry.
Deckers Outdoor Corporation (DECK - Free Report) , operating as Deckers Brands, is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories for casual lifestyle use and high-performance activities. The company is headquartered in Goleta, CA. Its portfolio of brands includes UGG, Koolaburra, HOKA ONE ONE, Teva and Sanuk. Deckers Brands’ products are sold in more than 50 countries.
Deckers carries a Zacks Rank #2. The company delivered a trailing four-quarter positive earnings surprise of 480.5%, on average. The consensus estimate for its next-year earnings has been revised 14.3% upward over the past 60 days. Year to date, the stock has added 74.1% compared with 37% growth of the industry.
Overstock.com, Inc. : Headquartered in Midvale, UT, Overstock.com is a leading e-commerce home furnishings retailer and advocate of blockchain technology. The company operates through Retail, tZERO and Medici Ventures segments. Its e-commerce website sells a broad range of new home products at low prices. Further, the company focuses on the development and commercialization of financial applications of blockchain technology.
Overstock carries a Zacks Rank #2 and has a VGM Score of B. In the September quarter, the company delivered a positive earnings surprise of 317.4%. The consensus estimate for its next-year earnings has been revised 82.5% upward over the past 60 days. Year to date, the stock has returned 738.2% compared with 62.9% growth of the industry.
Veritone, Inc. (VERI - Free Report) : Headquartered in Costa Mesa, CA, Veritone is a leading provider of artificial intelligence (AI) technology and solutions. The company’s proprietary operating system, aiWARE, powers a diverse set of AI applications and intelligent process automation solutions that are transforming commercial and government organizations. The company’s AI developer tools enable its customers and partners to easily deploy custom applications that leverage the power of AI to improve operational efficiency.
Veritone has a Zacks Rank #3 (Hold). The company delivered a trailing four-quarter positive earnings surprise of 14.1%, on average. The consensus estimate for its next-year earnings has been revised 19% upward over the past 60 days. Year to date, the stock has soared 1,116% compared with 13.1% growth of the industry.
Final Thoughts
Despite lingering worries, the optimism surrounding the COVID-19 vaccine, the Fed’s easing policy and ramped up federal infrastructure spending as part of getting the economy back on track will continue to support the market.
We have to see the developments on the new coronavirus strain in the U.K., and how the global markets react to it. One should remember that historic times create historic opportunities.
In 2021, we believe, there will be a correction, though not a major one, in the market. That said, the overall mood in Wall Street remains optimistic.
Ride the trend...
Happy Investing!
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
Image: Bigstock
5 Russell 2000 Stocks That Have Crushed the Index in 2020
It has been an unusual year in the stock market — one that will go down in history. From the pandemic lows in late March to a record-setting rally as the year draws to a close, 2020 has been a rollercoaster.
If we look back at 2020, the S&P 500 hit a bottom of 2,237.40 on Mar 23. Since then, it has gained 64.8%, closing at 3,687.26 on Dec 22. Few people had actually expected such a ‘fast and strong’ recovery, thanks to the liquidity in the market.
In this article, we will discuss five of the Russell 2000 companies that are among the top gainers this year.
About the Index
The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. It is one of the most widely used benchmarks for small-cap stocks because it is much broader than other indexes. This index, though very broad, composes less than 10% of the capitalization of the stock market.
The Russell 2000 Index has moved up 19.4% on a year-to-date basis. It closed at 1,989.88 on Dec 22.
Highly Volatile
Stocks in the Russell 2000 Index are relatively small, and that makes the index highly volatile. By and large, these stocks have a beta that is greater than one. High-beta stocks are supposed to be riskier but provide higher return potential. This makes it a favorite choice for aggressive investors.
5 Stocks That Hold Promise
We have selected five companies that have significantly outperformed the index so far this year. These frontrunners are well positioned to continue their winning streaks in 2021.
Nautilus, Inc. : Headquartered in Vancouver, WA, Nautilus is the global leader in innovative home fitness solutions. The company operates in two segments — Direct and Retail. Its diverse brand portfolio includes Bowflex, Nautilus, Schwinn and a broad selection of exercise bikes, cardio equipment, strength training products, as well as the JRNY digital fitness platform.
Nautilus currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of B. The company delivered a trailing four-quarter positive earnings surprise of 294%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 60.7% upward over the past 60 days. Year to date, the stock has skyrocketed 1,162% compared with 39% growth of the industry.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Trex Company, Inc. (TREX - Free Report) : Headquartered in Winchester, VA, Trex is the world’s largest manufacturer of high-performance wood-alternative decking and railing. Stocked in more than 6,700 retail locations worldwide, Trex outdoor living products offer a wide range of style options with fewer maintenance requirements than wood. The company sells its products through wholesale distributors, retail lumber dealers, and Home Depot (HD - Free Report) and Lowe's (LOW - Free Report) stores.
Trex carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter positive earnings surprise of 18.5%, on average. The consensus estimate for its next-year earnings has been revised 7.3% upward over the past 60 days. Year to date, the stock has gained 91.4% compared with 28.8% growth of the industry.
Deckers Outdoor Corporation (DECK - Free Report) , operating as Deckers Brands, is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories for casual lifestyle use and high-performance activities. The company is headquartered in Goleta, CA. Its portfolio of brands includes UGG, Koolaburra, HOKA ONE ONE, Teva and Sanuk. Deckers Brands’ products are sold in more than 50 countries.
Deckers carries a Zacks Rank #2. The company delivered a trailing four-quarter positive earnings surprise of 480.5%, on average. The consensus estimate for its next-year earnings has been revised 14.3% upward over the past 60 days. Year to date, the stock has added 74.1% compared with 37% growth of the industry.
Overstock.com, Inc. : Headquartered in Midvale, UT, Overstock.com is a leading e-commerce home furnishings retailer and advocate of blockchain technology. The company operates through Retail, tZERO and Medici Ventures segments. Its e-commerce website sells a broad range of new home products at low prices. Further, the company focuses on the development and commercialization of financial applications of blockchain technology.
Overstock carries a Zacks Rank #2 and has a VGM Score of B. In the September quarter, the company delivered a positive earnings surprise of 317.4%. The consensus estimate for its next-year earnings has been revised 82.5% upward over the past 60 days. Year to date, the stock has returned 738.2% compared with 62.9% growth of the industry.
Veritone, Inc. (VERI - Free Report) : Headquartered in Costa Mesa, CA, Veritone is a leading provider of artificial intelligence (AI) technology and solutions. The company’s proprietary operating system, aiWARE, powers a diverse set of AI applications and intelligent process automation solutions that are transforming commercial and government organizations. The company’s AI developer tools enable its customers and partners to easily deploy custom applications that leverage the power of AI to improve operational efficiency.
Veritone has a Zacks Rank #3 (Hold). The company delivered a trailing four-quarter positive earnings surprise of 14.1%, on average. The consensus estimate for its next-year earnings has been revised 19% upward over the past 60 days. Year to date, the stock has soared 1,116% compared with 13.1% growth of the industry.
Final Thoughts
Despite lingering worries, the optimism surrounding the COVID-19 vaccine, the Fed’s easing policy and ramped up federal infrastructure spending as part of getting the economy back on track will continue to support the market.
We have to see the developments on the new coronavirus strain in the U.K., and how the global markets react to it. One should remember that historic times create historic opportunities.
In 2021, we believe, there will be a correction, though not a major one, in the market. That said, the overall mood in Wall Street remains optimistic.
Ride the trend...
Happy Investing!
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>