Deep-Sea Small-Cap Mining Stocks Drilling Their Way to Gains

🌊 Making Waves

🔥 Small-Cap IPOs are Running Hot

Many called the past few months an initial listing revival after a long IPO drought that was, in retrospect, completely inevitable after 2020/2021’s surge of shitcos with little to no business going public (not to mention the multitude of crash-and-burn SPAC listings):

Big-name, oversubscribed IPOs made the most waves, with renewed enthusiasm mostly starting with CoreWeave in March, reinforced by eToro’s listing in May, with Circle’s explosive debut last week and Chime Financial’s strong showing yesterday hammering the point home.

But some major recent small-cap IPOs have plenty of momentum, particularly in “hard tech” sectors, and their success may prove a boon to upcoming initial small-cap listings.

Recent Red-Hot Small-Cap IPOs

• AIRO Group $AIRO.P ( 0.0% ) debuted yesterday, reinforcing my running thesis that defense tech, in general, and drone stocks, more specifically, are increasingly one of the best growth industries (covered, in part, here, here, and briefly here).

  Shares priced at $10 each for a starting $260 million market cap before doubling throughout Friday trading. That pegs AIRO’s market cap at $700+ million, more than 7x last year’s sales. For comparison, Red Cat Holdings $RCAT ( ▼ 4.69% ) trades at about 6x forward sales, while the longer-standing mid-cap drone stock, AeroVironment $AVAV ( ▲ 2.62% ), trades at 8x forward sales.

• Voyager Technologies $VOYG ( ▲ 9.84% ) also popped during its Wednesday initial listing, doubling a planned $31 per-share pricing and opening at $67 before rounding out Friday’s trading session at around $50 per share and a ~$3 billion market cap.

  Voyager’s strategic partnerships with Palantir $PLTR ( ▲ 1.64% ), Lockheed $LMT ( ▲ 3.66% ), NASA, and others help the space stock avoid the overhyped narrative trap that befell others like Virgin Galactic, instead offering a clear roadmap and tangible successes that put it in a category alongside similarly strong (though speculative) companies like AST SpaceMobile and Rocket Lab USA.

• MNTN $MNTN ( ▼ 7.03% ) debuted late last month and slid since its initial listing, to about $19 per share for a $1.5 market cap (down from ~$21 to start).

  Don’t let that dissuade you from the small-cap AdTech stock’s long-term strength, however, as the company’s sales growth and positive free cash flow demonstrate prudent financial management in a constrained macro climate, and the $200 million raise will boost the current $82.3 million cash position on its balance sheet.

💸 Small-Cap, High-Yield

La-Z-Boy Incorporated $LZB ( ▼ 1.32% ) 

You’re no doubt familiar with La-Z-Boy’s range of furniture offerings, but the overlooked small-cap dividend stock also offers a comfortable 2.28% forward yield.

By now, we all know that tightening home sale markets alongside a not-insignificant number of owners sitting on record-low ZIRP-era mortgages mean that homeowners will likely remain in their current place for longer than was once typical. That means increased interest in sprucing up current accommodations, which, likely as not, means a boost to La-Z-Boy’s bottom line as owners make their current place as comfortable as possible.

Management seems to agree, and, after a rocky start, its Joybird subsidiary (analogous, roughly, to IKEA brands) achieved breakeven operating profit and nearly 10% sales growth despite wider macro headwinds. Execs plan to open 3 or 4 new stores in the coming year, positioning the brand well to meet consumers at the intersection of budget-friendly and home improvement planning.

Upcoming Small-Cap Ex-Dividend Dates

If La-Z-Boy didn’t whet your appetite, these high-yield small-caps go ex-div within the next week:

Douglas Dynamics $PLOW ( ▼ 1.65% ) - June 17th

Yield: 4.05%

Known For: A range of commercial work truck attachments, including snowplows, spreaders, and similar accessories.

CSG Systems $CSGS ( ▼ 3.06% ) - June 18th

Yield: 2.01%

Known For: Digital revenue management and payment solutions for communications companies.

Dine Brands Global $DIN ( ▼ 1.16% ) - June 20th

Yield: 7.70%

Known For: Restaurant operations and franchising; brands include IHOP and Applebee’s.

💡 Weekend Watchlist: 3 Stocks to Study

Deep-Sea Mining Small-Cap Stocks

Trump’s recent push for offshore, deep-sea mineral and metals mining is kicking off a new growth sector as companies look to the ocean to reinforce domestic supply chains. While there isn’t yet much in the way of operationalized mining efforts, these small-caps are at the fore of the new, emerging market opportunity.

• The Metals Company $TMC ( ▼ 9.58% ): TMC is likely the most well-known deep-sea mining stock, with recent successful nickel sulfate extraction (usable for battery markets) positioning it as a long-term player to hedge against EV supply chain volatility.

• Odyssey Marine $OMEX ( ▼ 10.08% ): The company’s storied past includes shipwreck discovery, but inroads into deep-sea mineral exploration are proving an easy pivot due to experience and existing infrastructure.

• Transocean $RIG ( ▲ 3.43% ): RIG focuses, as the ticker implies, on deep-sea oil and gas rigs - but recent partnerships with deep-sea miners make Transocean a good diversification play to bet on underwater mining upside.