We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.
For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.
That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.
We expanded our universe to include some mid-caps.
To make the cut for our Minor Leaguers list now, a company must have a market cap between $1 and $4B.
And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.
The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to focus on the best players.
The goal is to catch the strongest names while they're small and have serious upside potential. If any of these stocks ever climb the ranks to the big leagues, the returns could be huge.
We're looking at up to 10x moves just to break into large-cap land!
Let's dive into this week's report and see what's happening in some of the hottest stocks in the Minor Leagues.
Here’s a look at the Russell 2000 $IWM:
After a handful of failed attempts these past few years, the small-cap index finally looks to have completed a primary trend reversal.
While 200 is the major line in the sand, and we're currently above it, there is still a lot of price memory ahead. We think the shelf of support from 2021 is likely to turn into resistance in the coming weeks.
The more important point about all this is that the path of least resistance has shifted to higher for small caps as a group. This will mean more long opportunities and more bullish chart patterns in scans like the Minor Leaguers.
Let's take a look at this week's table and talk about some of our current favorites.
*Click to enlarge view
Since we sort our list by proximity to 52-week highs, the names toward the top are potential future leaders. They're not just exhibiting impressive relative strength. They're also making new highs on an absolute basis.
With that as our backdrop, let's take the field and highlight this week's top players!
Batter up…
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