There are some strong buy Russell 2000 stocks for investors to consider adding to their portfolios in March 2024. While the overall market has experienced volatility in recent months, several small-cap companies within the Russell 2000 index have demonstrated promising growth prospects, and analysts are bullish on their prospects.
These stocks could offer attractive entry points for investors seeking diversification and exposure to potentially undervalued opportunities. I feel now could be a great time to consider these companies, especially as the valuations of stocks such as Nvidia (NASDAQ:NVDA) and other tech companies continue to be stretched to unsustainable levels.
The Russell 2000 stocks offer a nice balance between risk and reward, as well as being competitively priced to alternatives in the market. So, here are three Russell 2000 stocks for investors to consider in March. Don’t miss out on these picks and the opportunity to diversify your portfolio.
ACM Research (ACMR)
ACM Research (NASDAQ:ACMR) specializes in wet processing technology for the semiconductor industry. I think semiconductors will continue to perform strongly, and ACMR’s competitive valuation at 25 times earnings makes it a strong pick.
Looking ahead to ACMR, in addition to its Strong Buy rating from Wall Street, ACMR is forecasting strong performance with revenue projections ranging from $650M to $725M for the full year of FY2024. The company managed to increase its gross margin to 52.9% from 49.4% in FY2023, giving it another reason for investors to consider it.
Furthermore, Analysts have become more bullish on ACMR’s short-term and long-term prospects. Current quarter estimates have risen from 19 cents per share to 36 cents per share, and current year estimates have risen from $1.34 per share to $1.62 per share.
With all of these factors considered, ACMR is one of those Russell 2000 stocks that investors should carefully consider.
BellRing Brands (BRBR)
BellRing Brands (NYSE:BRBR) is a United States-based manufacturer of nutrition products, known for its Premier Protein and Dymatize brands.
Like all the other Russell 2000 stocks on this list, BRBR stock also carries a Strong Buy rating, but its optimistic outlook and recent financial results set it apart. Some analysts expect an 11% compound annual growth rate (CAGR) for its earnings into FY25. These results are buoyed by the performance of its Premier Protein brand, which saw impressive household penetration growth of 82% last year.
The company’s EPS is expected to rise 37.7% to $1.97 in 2025. Although the consensus on Wall Street is that it’s slightly overvalued by around 8%, some analysts have updated their models and suggested additional upside for BRBR stock.
For example, Pam Kaufman from Morgan Stanley (NYSE:MS) maintained his Buy rating and gave the company a price target of $65 this month. Matthew Smith from Stifel (NYSE:SF) maintained his Strong Buy rating with a price target of $63. These forecasts have an implied upside for BRBR stock of 12.34% and 8.88%, respectively.
ATI (ATI)
ATI (NYSE:ATI) is a seller of specialty materials and components, operating in two segments: High Performance Materials & Components and Advanced Alloys & Solutions.
Due to the threats of a recession in the United States fading, I feel that materials and industrial stocks such as ATI will see a resurgence in value. ATI itself has been on a hot run over the past five years, growing 93%.
I feel the best is yet to come for ATI investors. The reason is that it’s targeting $4.5B to $4.6B in sales and $0.8B to $0.9B in EBITDA by 2025, with EBITDA margins of 18% to 20%. By 2027, it aims to reach $5.2B to $5.4B in sales and $1.0B to $1.2B in EBITDA, with EBITDA margins of 19% to 21%.
It should be noted, however, that ATI is currently fairly valued by analyst estimates despite its Strong Buy rating. But next year, things may look more accretive for investors, as its EPS is expected to rise 29.04% to $3.02.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
