As I have been saying for quite some time, the smaller, less well-known stocks have been outperforming the well-known names as well as the overall market. New leadership is taking over and those investors that can identify new leadership are doing better than most market mirroring ETF’s. This is not a time to just buy the market and relax. A recession is very likely on its way. Most stocks will not do well in a slowing economy. Shifts in the economy will allow for some companies to benefit. Innovation will continue and generate economic benefit in certain sectors.

This past week, while Nasdaq was dropping 4.0%, there were 65 stocks hitting new 52-week highs in share price on that exchange. Many of these companies are innovators or able to take advantage of changes in the economy. One change we continue to see is the onshoring of manufacturing. This past week Apple announced that it will be using US made chips for the first time in nearly a decade. We spoke with iFabric this past week, and they told us they are actively looking for a new clothing manufacturer, away from China, including Mexico. What companies are able to take advantage of this new shift?  

We’ve been talking about how cheap so many nanocaps are and how it’s likely to stimulate takeovers and go private transactions. Well, this week we saw another company, ICPEI Holdings Inc. (ICPH.V) announce that key members of management of the company and certain other employees and shareholders of the company, will be purchasing all the outstanding shares and effectively taking the company private. The transaction is being done at a 90.5% premium to the previous day’s closing price.