29 Things To Look For In A Microcap Stock

29 Things To Look For In A Microcap Stock
Fiji by Julian Cohen. Why?

The Microcap opportunity represents thousands of growth companies that are creating big discoveries, technologies and companies of tomorrow

A Microcap Is A Publicly Traded US Company With A Market Capitalisation Between 50 And 300 Million US Dollars

Microcap Stocks Offer A Big Upside

Benefits Of Microcaps

Higher Potential Returns

Small Companies Outperform Big Companies Over Time

Valuation Disconnect

Lack Of Visibility = Higher Arbitrage

Nimble Companies And Boards

Mergers And Acquisitions Potential

Downsides Of Microcaps

Higher Risk

Less Analyst Coverage = Less Due Diligence By Market

Less Trading Volume

Thorough Due Diligence Can Mitigate Microcap Downsides

The infographic below provides some helpful insights into the whole area of microcap companies, illustrating what a significant opportunity this sector of the market can offer. 

As with every type of loan and investment opportunity you might wish to consider for your SIPP, maximising return and minimising risk is all about the level of due diligence you undertake.  When it comes to analysing microcap stocks, you’ll find what you need to consider clearly set out in the following sections:

  • The People
  • The Capital Structure
  • The Numbers
  • The Differentiators and Catalysts
  • The Valuation

The microcap infographic ends with a useful section on the Tricks of the Trade. 

Courtesy of: Visual Capitalist

 

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