LYTS: Poised for Growth Acceleration & 100% Upside
Revisiting a stock already added to our Microcap Quality Index
I trust all of you are getting ready for the holidays. Hopefully, it ends up being a great one. Thanks for all your support for this helping our substack grow. We’re incredibly excited about 2026. Our pipeline of potential quality MultiBagger microcaps and high probability turnarounds has never been better. It’s been really fun running a Substack for nearly 3 years and building a quality index (MSMqi).
You should know that we don’t always add stocks to the index at the moment they are timely. We love being “too” early, if an idea has enough clues make it interesting.
Now that we have 127 stocks in the index, we’re having a lot of fun hunting in the index for stocks that are getting more timely than they were when we originally added them.
That’s why recently issued updates on ITRN and BRM.V… because we think they are entering a new elevated growth phase and thought they deserved an update. You can see both of those post updates here and here.
And that’s why we’re revisiting LYTS, a stock we first added to the MSMqi in 2023.
When we added the stock to the MSMqi, we knew it was not terribly undervalued, but I interviewed this management team and was super impressed. So, we wanted to get the stock into the index.
By the way, some people automatically assume that all microcaps are early stage or unsubstantial operations. Well, LYTS illustrates that this is far from true.
Proven management
Sales: $573M in 2025
Substantial profitability
Employs 2,000 people at 19 manufacturing plants in the U.S. and Canada
We’ve been waiting for growth to be a little more aggressive and consistent, and it appears that that could now be the case. When we first found the stock, it was coming towards the end of a multi-year growth plan, which it actually met earlier than anticipated, so the growth slowed down on a comparative basis. It seems that that’s all behind them now and that we’re finally going to have a period of nice quarterly growth for six or seven quarters (starting a in Q1).
One thing we really like right now is that analyst projections understate LYTS’s growth potential and earnings capacity. This leaves room for nice upside earnings surprises.
LYTS is up 31.6% since we added it to the MSMqi, but off its high of up 79.7%… another great reason to revisit the story. Shares trade on the NASDAQ and are fairly liquid, as far as microcaps go.
What Does LYTS Do?
LSI Industries Inc. is a U.S.-based industrial solutions company specializing in lighting and display solutions for various markets, including grocery, convenience stores, quick-serve restaurants, refueling, warehousing, sports facilities, and banking. You may have noticed that lots of convenience stores and gas stations that you’re visiting are becoming a lot “friendlier” to visit.
LYTS is pretty much a one-stop suite of solutions: refrigerated and non-refrigerated display cases, counters, kiosks, beverage centers, bakery cases, and digital signage. This approach allows the company to capture multiple revenue streams per customer, positioning it as a full-service provider in industries that traditionally rely on multiple vendors.