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 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.
The micro cap stock definition is companies with a market cap between $50M - $300M. There are currently 941 micro cap stocks trading in the U.S. (excluding OTC / pink sheet stocks).
Microcap stocks are smaller than small cap stocks, but larger than nano cap stocks.
Examples of micro cap stocks include companies such as Hamilton Beach Brands (HBB), Vitamin Shoppe (VSI), FuelCell Energy (FCEL), AudioEye (AEYE), Eastman Kodak (KODK), First US Bancshares (FUSB), American River Bankshares (AMRB), Peoples Bancorp of North Carolina (PEBK), Kirkland's (KIRK), Red Violet (RDVT), Ark Restaurants (ARKR), Brightcove (BCOV), and Bassett Furniture (BSET).
The nano cap stock definition is companies with a market cap between $0M - $50M. There are currently 500 nano cap stocks trading in the U.S. (excluding OTC / pink sheet stocks).
Nano cap stocks are smaller than both small cap stocks and micro cap stocks.
Examples of nano cap stocks include companies such as Sphere 3D Corp (ANY), U.S. Gold Corp (USAU), Art's Way Manufacturing (ARTW), CafePress (PRSS), Riot Blockchain (RIOT), Socket Mobile (SCKT), Orchids Paper Products (TIS), AutoWeb (AUTO), and many more.
Across the small cap market, some companies are on the way up (fast growing), others are on the way down (in decline), and many are long-time steady performers.
While most are not well know, we believe small cap companies offer some of the best opportunities for undervalued high growth stocks that can outperform the market.
All data as of 10/5/18
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