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Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.

The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we’re here to guide you toward the right ones. Keeping that in mind, here is one Russell 2000 stock that could be a breakout winner and two best left off your watchlist.

Two Stocks to Sell:

Sabre (SABR)

Market Cap: $977.3 million

Originally a division of American Airlines, Sabre (NASDAQ:SABR) is a technology provider for the global travel and tourism industry.

Why Do We Pass on SABR?

1. Number of central reservation system transactions has disappointed over the past two years, indicating weak demand for its offerings

2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $2.52 per share, Sabre trades at 13.6x forward P/E. Read our free research report to see why you should think twice about including SABR in your portfolio, it’s free.

Tutor Perini (TPC)

Market Cap: $1.94 billion

Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.

Why Are We Wary of TPC?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle

2. Gross margin of 6.1% is below its competitors, leaving less money to invest in areas like marketing and R&D

3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Tutor Perini is trading at $38.40 per share, or 17.7x forward P/E. Check out our free in-depth research report to learn more about why TPC doesn’t pass our bar.

One Stock to Buy:

Remitly (RELY)

Market Cap: $4.35 billion

With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ:RELY) is an online platform that enables consumers to safely and quickly send money globally.

Why Is RELY a Good Business?

1. Active Customers have increased by an average of 37.3% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features

2. Additional sales over the last three years increased its profitability as the 74% annual growth in its earnings per share outpaced its revenue

3. Free cash flow margin increased by 35.6 percentage points over the last few years, giving the company more capital to invest or return to shareholders