Small caps are a very exciting and highly profitable area of the market to invest in.
But finding the best companies among the ocean of small cap stocks can be like searching for a needle in a haystack.
Today we’re going to cover four important questions about finding the best small cap stocks:
Let’s dig into exactly what small caps are and how to find the best among them.
What exactly is a "small cap stock"?
While we often refer to "small cap stocks" as small companies with a market cap of less than $2B, there are actually a few different tiers of small companies:
The true small cap stock definition is companies with a market cap between $300M - $2B. There are currently 1,508 small cap stocks trading in the U.S. (excluding OTC / pink sheet stocks).
Examples of small cap stocks include well known companies such as Tootsie Roll Industries (TR), Papa John’s (PZZA), Bed Bath & Beyond (BBBY), Sonos (SONO), Big Lots (BIG), Abercrombie & Fitch (ANF), Office Depot (ODP), Hertz Global (HTZ), Tupperware Brands (TUP) and many more big name brands.
However, the vast majority of small cap stocks are lesser-known companies such as KMG Chemicals (KMG), Fabrinet (FN), New Age Beverages (NBEV), Forward Air (FWRD), CorePoint Lodging (CPLG), Endocyte (ECYT), and many others.
In order to find the best small cap stocks, you have to keep in mind...
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