Why should you invest in small-market-cap stocks?
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Posted On: 08/05/2022 9:27:31 AM
Why should you invest in small-market-cap stocks?
Small cap stocks have the potential to maximize returns. The best reason to invest in small cap stocks is their greater potential to deliver outsized returns compared to larger companies. For instance, it's considerably easier for a $1 billion company to become a $10 billion one than it is for a $100 billion company to grow to $1 trillion. In fact, some of the biggest companies in the world once traded in the small cap range, such as Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX). If you had bought and held these stocks when they were small, you would have seen your initial investment appreciate more than 100 times.
Small cap stocks tend to have higher growth rates. Again, it's easier for a smaller company to double its revenue; mature companies tend to see slowing revenue growth.
Small cap stocks are shares of publicly traded company with market values between $300 million and $2 billion. Some companies in the small cap universe (or in small cap indexes) may at any given time have market caps substantially higher than this range because the share prices of these businesses can be extremely volatile.
The printing and imaging company Eastman Kodak Co., the retail pharmacy chain Rite Aid Corp., and the insurance company Genworth Financial Inc. are some of the companies whose stocks are categorised as small caps.
Another company with a small cap is $rgc, Regencell Bioscience with 433 million market cap. The company has gained 232% gain since IPO (July 2021). RGC'S CEO personally funded the company and did not pay himself back after IPO. The CEO has also continuously funded the company since its incorporation up to the IPO without bank borrowing. He converted his shareholders’ loan of $3.25 million to RGC’s ordinary shares upon listing. More uniquely, the CEO also promised not to withdraw salary and bonus of more than US$1 until the company reaches US$1 billion market capitalisation.
https://www.investopedia.com/investing/top-small-cap-stocks/
https://www.fool.com/investing/stock-market/t...20trillion
https://finance.yahoo.com/quote/RGC?ltr=1
Small cap stocks have the potential to maximize returns. The best reason to invest in small cap stocks is their greater potential to deliver outsized returns compared to larger companies. For instance, it's considerably easier for a $1 billion company to become a $10 billion one than it is for a $100 billion company to grow to $1 trillion. In fact, some of the biggest companies in the world once traded in the small cap range, such as Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX). If you had bought and held these stocks when they were small, you would have seen your initial investment appreciate more than 100 times.
Small cap stocks tend to have higher growth rates. Again, it's easier for a smaller company to double its revenue; mature companies tend to see slowing revenue growth.
Small cap stocks are shares of publicly traded company with market values between $300 million and $2 billion. Some companies in the small cap universe (or in small cap indexes) may at any given time have market caps substantially higher than this range because the share prices of these businesses can be extremely volatile.
The printing and imaging company Eastman Kodak Co., the retail pharmacy chain Rite Aid Corp., and the insurance company Genworth Financial Inc. are some of the companies whose stocks are categorised as small caps.
Another company with a small cap is $rgc, Regencell Bioscience with 433 million market cap. The company has gained 232% gain since IPO (July 2021). RGC'S CEO personally funded the company and did not pay himself back after IPO. The CEO has also continuously funded the company since its incorporation up to the IPO without bank borrowing. He converted his shareholders’ loan of $3.25 million to RGC’s ordinary shares upon listing. More uniquely, the CEO also promised not to withdraw salary and bonus of more than US$1 until the company reaches US$1 billion market capitalisation.
https://www.investopedia.com/investing/top-small-cap-stocks/
https://www.fool.com/investing/stock-market/t...20trillion
https://finance.yahoo.com/quote/RGC?ltr=1
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