The 3 Best Russell 2000 Stocks to Buy in January 2024

Michael Que

Wed, Jan 10, 2024, 5:38 AM 4 min read

The U.S. economy, resilient in 2023, is expected to continue its positive momentum into 2024, driven by robust consumer spending and solid job gains. Federal Reserve Chairman Jerome Powell’s hint at potential interest rate cuts adds to the optimism, despite concerns about inflation. The outcome of the November national election is seen as the main uncertainty, but experts anticipate a generally positive economic outlook for the year. Therefore with this positivity, you need to invest in these three top Russell 2000 stocks of the U.S. economy.

Celsius Holdings (CELH)

CELH stock: A view of several cases of Celsius energy drinks, on display at a local big box grocery store.

Source: The Image Party / Shutterstock

Celsius Holdings (NASDAQ:CELH) is a beverage company focused on developing a product for pre-exercise purposes, accelerating metabolism, and burning calories. CELH has seen great recent growth with a year-over-year valuation increase of 78.61%, reaching the value today of $58.15.

Despite competition running rampant, CELH is located in the beverages market. Projected to gross $294.5 billion in 2024, the beverages industry is expected to increase to $448.6 billion in 2028. Further, this slates to be a 4-year CAGR of 11.09%.

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On the financial side, Celsius performed exceptionally well in Q3 2023. Revenue-wise, CELH brought in $384.7 million last quarter, marking a YoY growth of 104.4%. Net income and EPS also saw significant YoY increases of approximately 140% each. Celsius’s performance outlasted forecasts, beating industry projections for EPS and revenue by 91.85% and 9.45% respectively.

Through advertisements and endorsements Celsius has expanded brand awareness, reaching the billion-dollar brand status it holds today. Investors should look towards strong distribution in collaboration with PepsiCo as a sign of future profitability and brand expansion. As PepsiCo looks to expand its fitness beverage product list, Celsius is expected to reach more shelves nationwide, proving to be a great Russell 2000 stock.

Super Micro Computer Incorporated (SMCI)

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Super Micro Computer Incorporated (NASDAQ:SMCI) designs and develops computing solutions. WSJ analysts gave SMCI eight ‘buy’ ratings and forecast a median 12-month price target of $400.00, ranging from a high and low of $500.00 to $160.00. SMCI stock is up 277.82% in the last year, sitting at $320.28 per share.

The global IT industry is expected to grow at a CAGR of 11%, valued at $94.63 million in 2022, and predicted to reach $177.48 million by 2028. The increasing adoption of IoT tech, the surge in e-commerce, and the emergence of AI are various factors that accelerate this industry’s growth.

SMCI has reported solid Q1 2024 results, with a revenue of $2.12 billion, a 14.45% YoY growth. Cash flow through operations was reported as $271 million. The company also saw a surge in EPS to $11.81 at the end of 2023 from $5.65 in 2022, a 109.03% YoY increase.

On December 14, Super Micro announced its partnership with Intel’s new 5th Gen Xeon processors. The company aims to offer rack scale and play solutions that will enable users faster response rate and efficiency. This technology yields an 87% gain in average performance and a 67% performance boost in AI benchmarks, innovating within the central processing unit market.

Elf Beauty Inc. (ELF)

an elf branded beauty product on a stone counter

Source: Lisa Chinn / Shutterstock.com

Elf Beauty Inc. (NYSE:ELF) is a cosmetics company that strategically targets Gen-Z and Millennials by offering affordable beauty products and emphasizing social responsibility. As of now, ELF stock has experienced a remarkable one-year surge of 170.18%, reaching a current price of $150.65.

The company is strategically expanding its presence in major retailers such as Walgreens, CVS, and Ulta Beauty. Elf’s ability to boost sales by 70% at Ulta Beauty without increasing shelf space indicates the potential for significant sales growth with the additional shelf space. Furthermore, Elf benefits from the aging and increased discretionary income of its customer base, primarily consisting of Millennials and Gen-Z, who were attracted by the brand’s strong commitment to social responsibility and competitive pricing. As this demographic continues to mature and contributes a larger share of consumption, Elf’s market share in the broader cosmetics industry is poised to expand.

With its surging popularity, expanding shelf space, and consistently growing customer base, Elf Beauty Inc. emerges as an attractive ‘buy’ for growth investors, particularly those seeking diversification beyond the tech sector in their portfolios.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.