The Minor Leaguers

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.

Here’s a look at the Russell 2000 $IWM:

Small caps just lost the level they needed to hold. The Russell 2000 has slipped back under 242, which was the breakout line and the spot buyers defended last week. That tells us the move was not accepted, at least not yet.

This is the kind of price action that separates real leadership from one-off pops. Breakouts that stick confirm strength. Breakouts that fail tell us supply is still active. Small caps now need to reclaim 242 to get the momentum back on their side.

Below 242, the path is not as clean. Leadership shifts back to names already trending and holding relative strength. If IWM can recover this level again, the broader bull market gets another key engine back in gear. Until then, patience is key.

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…