From the Desk of Steve Strazza @Sstrazza
Welcome to The Minor Leaguers.
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.
Nowadays, to make the cut for our Minor Leaguers list, 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.
First, here’s a look at the Russell 2000 $IWM:
Over the past few weeks, small-cap stocks have been on fire on both absolute and relative terms.
The base breakout is in, the path of least resistance is pointing up, and we are on the hunt for opportunities to get long the strongest names.
Let's take a look at this week's table:
*Click to enlarge view
Since we sort our list by proximity to all-time 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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