As most of you know, we use various bottom-up tools and scans to complement our top-down approach.
It's really been working for us!
One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn't just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Traders have made a lot of noise about the recent correction in Apple. And yes, the selloff has been large (for Apple).
But with daily trading volumes beginning to wane, it feels to me that the run has begun to exhaust itself and bears will have one more last-ditch opportunity with earnings on the horizon.
Barring something unusual, I think there will be something to disappoint both bears and bulls alike, amounting to a whole lot of nothing. Which sets up the perfect time for a sideways bet.
From the Desk of Steve Strazza and Alfonso Depablos
The largest insider move on today’s list comes via multiple Form 4 filings from insiders of Pagaya Technologies Ltd $PGY.
The chief executive officer, the chief people officer, the chief technology officer, the president, and one director all bought $PGY shares, their combined purchases totaling $2,012,401.
It's the sound of traders getting chopped up. Crypto markets are consolidating. What's wrong with that?
After the moves we've seen down the cap-scale, some period of sideways price action is perfectly healthy! But while these markets digest their gains, I think it's best to leave trading to a minimum for now.
Today we'll be revisiting a number of our previous trade ideas and outlining a mean reversion setup in Helium.
When putting on positions with undefined risk (naked short puts, or short strangles, for example), one question I often get asked is: “How do you determine your position size?”
This is perhaps the most important question to ask when putting on these types of trades!
I have two imprecise, imperfect ways that I decide:
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.
