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.
Here’s a look at the Russell 2000 $IWM:
It’s official: the Russell 2000 has cleared the 242 barrier. The same level that capped every rally since early 2021. IWM is now trading at fresh all-time highs after 967 trading days stuck below that line, which was the longest stretch without a new high in the index’s history.
This isn’t just a number on the screen. It marks a structural regime shift for one of the market’s key risk barometers. After almost four years of failed attempts, small caps have pushed through a massive base with real momentum behind them. That turns what had been dead weight into potential leadership.
Above 242, the path of least resistance opens higher. Former resistance should now act as support, and leadership from names with strong relative strength becomes even more critical. A sustained breakout here would add depth to the broader uptrend, which now is confirming that risk appetite is expanding beyond the megacap core.
Let's take a look at this week's table:
*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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