Four Homerun Small Cap Stocks to Consider for Grand Slam Potential in Your Portfolio

While we tend to be the “fan” who goes to a Wednesday afternoon game to have a plausible reason to eat hotdogs, drink adult beverages and miss work, there are actually people who like baseball. Right now, those people are living their best “fan life” as the baseball playoffs are now in full swing. Yesterday, brooms came out across the board as the Twins, Diamondbacks, Phillies and Rangers made it into the playoffs, winning the first 2 of 3 Wild Card round games. On Saturday, these Wild Card winners will begin the first round of playoffs and play one of the four teams who have already placed first in their divisions (Astros, Braves, Dodgers and Orioles).

Let’s be honest, even if you are the kid in the outfield chasing butterflies, its almost un-American to not like baseball. Sure, no one is hitting someone each play and you may only see one run score during an entire game, but there’s plenty more to enjoy about America’s pastime. If you still disagree, open your mind as we explore the “best of baseball” paired with some relatable small-cap homerun stocks or just be a Commie. Your choice.

It’s In the Game…

Flashback to the early 90’s as you fire up your N64 to play some Major League Baseball featuring no other than, Ken Griffey Jr. Ah… the nostalgia. So, for starters, one thing folks like about baseball is the actual game. If you think it’s as interesting as watching paint dry, up until Tuesday you could have had a reasonable argument. However, there’s no time like now to get into baseball because the playoffs are where the action happens as bandwagon fans pull their jerseys out of the closet. So, especially if your city is in it this year, now is the time to try watching. Unless you’re from Houston. Friends don’t let friends become Astros fans.

Aerospace and defense company, Kratos Defense and Securities Solutions, Inc. (KTOS) falls into our definition of a “homerun stock” which must be higher on the year than the S&P, sitting up ~10% YTD. KTOS is trading up at ~46% YTD. The company recently announced a significant expansion to their relationship with Hypersonix as they plan to bring the DART AE Hypersonic system to the US which will be integrated with Kratos’ Zeus family of solid rocket motors.

It’s Worth the Look…

Now, we get that sports just might not be your thing, but there’s still a chance we can convince you. Ever look at a baseball player? 8 out of 10 are total studs. If you need help, google “Derek Jeter”. Unfortunately, it’s not the 90’s and he’s married. So, while it’s likely you won’t be receiving a “DJ gift basket”, there’s a lot of solid current prospects out there today. If you aren’t into checking out the players, rocking the “baseball fan look” might be worth a shot. Baseball attire never goes out of style. Ever heard of the baseball cap not being “in”? Unless the National Anthem is playing, you’re inside a dining establishment or working your way into the “big unknown in the sky”, at a religious service, a baseball cap can be a fashion statement. Although, we just wear them to mask our bad hair days.

For all of you brave folks who are branching out to give baseball a try or even pretend to be a fan, we applaud you. To those true fans of the sport, here’s something you may not know… The Atlanta Braves are publicly traded and are the only team in the MLB you can find on an exchange. The stock is trading up ~13% YTD. Atlanta Braves Holdings, Inc. (BATRK) began trading this year in July, as the team and its associated mixed use developments split off of Liberty Media Corporation (FWONK). A bit short of a month later, they announced Q2 earnings citing baseball revenues up 8% and mixed use developments up 13%.

It’s About the Beer Snake…

Even if peanuts and crackerjacks are not your favorite snack, baseball stadiums have come a long way since beer and hotdogs. So, if we have lost you on watching the game, walk the park for some delectable bites. For example, Dodger Stadium has some interesting eats. You may want to check out their deep-fried cheesecake, Flamin’ Hot Cheeto corndog, or hotdog served on Kings Hawaiian buns. Your beverage options have also expanded from the traditional baseball brewskis. However, glass bottles are prohibited in stadiums so don’t expect to be popping any corks to drink bubbly at a game. Leave that to Sosa or McGuire.

To anyone who can find a small-cap hotdog company or any hotdog company that would be considered a “homerun stock”, let us know and we will buy you a beer, so you can add to the beer snake, at the next game. Believe us, we tried. Natural Grocers by Vitamin Cottage, Inc. (NGVC) is trading up ~40% YTD. The natural and organic grocery retailer recently announced the opening of its 6th store in Twin Falls, Idaho, continuing its plans for expansion. The company currently operates 165 stores across 21 states.

It’s Always Good to Stretch…

So, let’s say you aren’t a baseball fan, but you heed our advice and try attending a game. However, you end up in a sad (but highly unlikely) situation where the game is boring, every player is unattractive, the team hat is unfashionable, and the food at the stadium is garbage. Sounds like you’ve stumbled into Baltimore. But wait, there is still hope…. people watching! Baseball games have the best atmosphere for this. Now, we don’t know much about Orioles fans besides them being from Baltimore, but that’s really all we need to know, if we are banking on seeing a fight break out, in the stands. If you’re not in a rough and tumble city, there’s always the big screen “Kiss Cam” or watching people dressed as giant hotdogs race around bases, during commercial breaks. If none of that sounds appealing, the fan favorite tradition known as the seventh inning stretch, is always something you can count on.

While we did enjoy taking a jab at Baltimore, we do have to tip our cap to them as this will be the third time, the team has made the post season, in 30 years. Their last appearance was in 2014. Besides this year’s baseball team, Baltimore has one other highlight to tout. Just outside of Baltimore is where Rekor Systems, Inc. (REKR) is headquartered. The Columbia, MD based company is up ~84% YTD. While it may be the definition of a microcap, trading ~$2, this AI driven tech stock recently announced that its Rekor Command platform for AI-based traffic management is now available, in the Amazon Web Services marketplace. We might even consider adding this one to our PRISM Emerging NextGen Tech Index.

As playoff baseball begins, we wonder if adding these four small-cap stocks to our portfolio will be the next Grand Slam investment. To those “non-baseball fans” we have convinced to view the sport with a newfound love and give the game a try, we offer two last pieces of advice:

The “points” are called “runs”.

Do not, under any circumstance, ever try to catch a ball that is in play. Just ask Steve Bartman.

Go, Cubs!

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About the Author

Four Homerun Small Cap Stocks to Consider for Grand Slam Potential in Your Portfolio

Ashlee Vogenthaler

Markets Editor