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Buy the Bayou? 2 Louisiana Microcaps for Your Watchlist
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Key Takeaways
Economic development in Louisiana is booming.
CLST and XPON could potentially benefit.
The state of Louisiana seems to be on an economic roll with the recent SpaceX announcement to build a $100 B commercial spaceport in Vermilion Parish, located in the Southwest part of the state. Construction could begin in 2027 pending regulatory approvals.
This high-profile economic development comes on the heels of several other large development deals in the State. These include an announced data center expansion by Meta in Richland Parish in the Northeast section of the state, as well as a major data center project by Applied Digital in Rapides Parish, located in the Central part of the state.
In the case of Meta, the company has earmarked additional investments for infrastructure, so the capital infusion goes beyond just the construction of a data center.
One stock that immediately came to mind in the Zacks Microcap Coverage universe was Catalyst Bancorp, Inc. (CLST - Free Report) , a regional Louisiana bank with an Outperform rating. While Catalyst Bancorp, Inc. (CLST - Free Report) had previously served the South-Central part of the state, it’s recent acquisition of Lakeside Bancshares will enable more exposure to the Southwest part of the state.
Image Source: Zacks Investment Research
Robust economic regional activity is generally a positive for local banks.
The other microcap with Louisiana exposure is Expion 360 Inc. (XPON - Free Report) , which is a new entrant into the Louisiana scene via its recent purchase of oil and gas assets in Eastern Louisiana. This foray into a new vertical for the lithium battery manufacturer was accompanied by a $9 m PIPE and a name change to Expion Energy from Expion 360 Inc. (XPON - Free Report) .
Image Source: Zacks Investment Research
This is quite a business pivot which also includes hiring a new CEO with deep energy experience. The bet here is that Louisiana will see increasing power demands from AI data centers resulting in production growth for natural gas. Additionally, the potential drilling sites can access the Gulf Coast LNG infrastructure.
It’s worth noting that Louisiana processes over 60% of the country’s LNG exports while also holding about 6% of the country’s natural gas reserves.
The stock has responded favorably to the asset acquisition news. Zacks has upgraded the stock to Neutral as the PIPE should alleviate near-term liquidity issues. Look for drilling updates on the new assets.
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Image: Bigstock
Buy the Bayou? 2 Louisiana Microcaps for Your Watchlist
Key Takeaways
The state of Louisiana seems to be on an economic roll with the recent SpaceX announcement to build a $100 B commercial spaceport in Vermilion Parish, located in the Southwest part of the state. Construction could begin in 2027 pending regulatory approvals.
This high-profile economic development comes on the heels of several other large development deals in the State. These include an announced data center expansion by Meta in Richland Parish in the Northeast section of the state, as well as a major data center project by Applied Digital in Rapides Parish, located in the Central part of the state.
In the case of Meta, the company has earmarked additional investments for infrastructure, so the capital infusion goes beyond just the construction of a data center.
One stock that immediately came to mind in the Zacks Microcap Coverage universe was Catalyst Bancorp, Inc. (CLST - Free Report) , a regional Louisiana bank with an Outperform rating. While Catalyst Bancorp, Inc. (CLST - Free Report) had previously served the South-Central part of the state, it’s recent acquisition of Lakeside Bancshares will enable more exposure to the Southwest part of the state.
Image Source: Zacks Investment Research
Robust economic regional activity is generally a positive for local banks.
The other microcap with Louisiana exposure is Expion 360 Inc. (XPON - Free Report) , which is a new entrant into the Louisiana scene via its recent purchase of oil and gas assets in Eastern Louisiana. This foray into a new vertical for the lithium battery manufacturer was accompanied by a $9 m PIPE and a name change to Expion Energy from Expion 360 Inc. (XPON - Free Report) .
Image Source: Zacks Investment Research
This is quite a business pivot which also includes hiring a new CEO with deep energy experience. The bet here is that Louisiana will see increasing power demands from AI data centers resulting in production growth for natural gas. Additionally, the potential drilling sites can access the Gulf Coast LNG infrastructure.
It’s worth noting that Louisiana processes over 60% of the country’s LNG exports while also holding about 6% of the country’s natural gas reserves.
The stock has responded favorably to the asset acquisition news. Zacks has upgraded the stock to Neutral as the PIPE should alleviate near-term liquidity issues. Look for drilling updates on the new assets.