The Russell 2000 index comprises the top small-cap companies within the Russell 3000 index. Its annual reconstitution took place on June 28.
The iShares Russell 2000 ETF (NYSEARCA:IWM) tracks the Russell 2000 index; it has increased by 8% over the last year.
The index is a solid resource for investors seeking investment opportunities in small-cap stocks. There are approximately 2,000 companies to choose from.
Below, I discuss three of the best Russell 2000 stocks in terms of performance and share price appreciation over this last year.
Sprouts Famers Market (SFM)
Sprouts Farmers Market (NASDAQ:SFM) is a food retail business that offers fresh and organic food products within various categories, including dairy, meats, frozen foods, produce, supplements, baked goods and non-perishable products.
Over the past year, its share price has increased 125% due to its increased revenue growth, ability to attract more health-conscious customers and outpacing its competition. Those competitors include Casey General Stores (NASDAQ:CASY) and Kroger (NYSE:KR), which have only returned 53% and 7% over this last year, respectively.
On May 1, Sprouts announced its earnings for the first quarter of 2024, which stated that total revenue increased by 9% and net income rose by 50% to $114 million year-over-year (YOY). It also opened seven new stores within the quarter.
On May 23, its Board of Directors approved a $600 million share buyback program, which replaces its current program with $120 million remaining. This new repurchase program will expire by May 2027 unless acted upon.
SFM is an outlier within its industry, but it still offers potential upside for investors. It is a solid choice for investors seeking a solid rate of return.
SkyWest (SKYW)
SkyWest (NASDAQ:SKYW) is a regional airline that offers passenger and cargo transportation services. It also provides on-demand charters and leasing aircraft services. It operates a fleet of approximately 500 aircraft.
On April 25, SkyWest reported earnings for the first quarter of 2024, stating that total revenue increased by 16% YOY. A net loss of $22 million was reported for the first quarter of 2023, shifting to a net income of $60 million for the first quarter of 2024.
Over the past year, its share price has doubled due to increased revenue growth and growing travel demand. Similar to SFM, it has far outpaced its competition, with stocks such as Southwest Airlines (NYSE:LUV), American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) all reporting a drop in share price over this past year.
SkyWest is experiencing growth in its overall travel demand among customers. With airfares dropping by 6% in May compared to the year before, SkyWest is poised to take full advantage of the busy summer travel season.
Investors should strongly consider it as an addition to their investment portfolios.
Q2 Holdings (QTWO)
Q2 Holdings (NYSE:QTWO) is a software application company that provides cloud-based solutions. It primarily offers its customers a digital banking platform for individuals and businesses.
Over the past year, Q2 Holdings’ share price has increased by 99%, primarily due to increased earnings growth. Following its most recent earnings report, its share price immediately rose by 15%.
On May 1, QTWO reported earnings for the first quarter of 2024, stating that total revenue increased by 8% and total subscription revenue rose by 18% compared to the year before. Q2 Holdings also raised its revenue guidance for the full year 2024, in which total expected revenue between $686 million and $692 million will represent a 10% to 11% growth YOY.
Q2 Holding has experienced impressive share price appreciation and its updated guidance has drawn in new investors, making it a stock to watch closely.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
