What are small-cap stocks?
Small-Cap stocks are stocks with low market values, generally less than $1 billion, and often far below that.
These stocks offer the potential for rapid price appreciation, as a business grows and the stock becomes discovered by institutional investors. But they also offer greater risk, because smaller businesses fail more easily than large ones, and the lack of support from institutional investors means these stocks can collapse quickly.
In any event, deep fundamental research is required for successful investing in small-cap stocks, in part because their charts provide less information than the charts of heavily traded larger stocks.
A subsector of small-cap stocks is penny stocks, which trade, as the name says, for pennies—less than dollar a share.
Cabot Small-Cap Confidential prefers stocks trading between one dollar and ten dollars per share, though there are exceptions. We’ve found the best profits—and fewest losses—by investing in stocks in this region, and we’d love to share our ideas with you in a Special Report on Small-Cap Stocks.
When you get your free report, you will also receive your BONUS, a no-cost subscription to the Cabot Wealth Advisory, your source for timely market insights and stock recommendations from our experts.
Best Small-Cap Stocks
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Click on these links for more information about small-cap stocks:
Guide to Small-Cap Investing
An introductory guide to small-cap investing—ten rules for investing early in tomorrow’s top stocks.
Small-Cap Stock FAQs
A collection of selected questions from Cabot Small-Cap Confidential Report subscribers and responses from Editor Thomas Garrity.
Stop-Losses for Small-Caps
Stop losses aren't of great value with small-cap stocks since they are so thinly traded and volatile.
Small Cap Buy and Sell Philosophy
The size of any given holding may be determined based on the risk profile of the company.