The Minor Leaguers (03-29-2021)

From the desk of Steve Strazza @Sstrazza

In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."

We write a post every other week where we outline some of our favorite setups from this universe of stocks.

We've already had some great trades come out of this column and couldn't be happier about the early feedback.

Moving forward, we'll be rotating this column with "Under The Hood" each week.

In order to make it onto our Minor League list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.

Then, we simply sort the stocks by their percentage from new highs. Easy done.

The idea is to catch the strongest names while they're still small and have serious upside potential. If any of these stocks ever climb up the ranks to the big-leagues, just imagine the returns. We're looking at 5-10x moves just to break into large-cap status!

And what better time than now to launch a small-cap focused column? We've seen very strong evidence of a structural rotation down the market cap scale, suggesting a new period of outperformance from small-caps in the coming months and quarters.

This column is a great way to take advantage of that trend.

Let's dive in and check out this week's list of the hottest stocks in the Minor Leagues.

With Small-caps under pressure as a group over the past few weeks, the ones holding up the best are doing so for a reason. That has our attention and are the names we're focused on in this report. That's why we sorted the table by proximity to all-time highs.

All of the names above are either trading at or within about 4% of highs.

Now let’s dive in and look at the most favorable bullish setups we could find within our universe of the strongest small-caps.