Small-capitalization stock

(redirected from Small Cap Stocks)

Small-Capitalization Stock

A stock in a publicly-traded company with low amount of market capitalization. In general, a small-cap company has a market capitalization of less than $1 billion or $2 billion, but there is no specific definition. Some brokerages or exchanges have slightly different definitions of small-cap. Some indexes track small-cap companies, as do some exchange traded funds. See also: High-cap, Mid-cap.

Small-capitalization stock.

Shares of relatively small publicly traded corporations with a total market capitalization of less than $2.3 billion are typically considered small-capitalization, or small-cap, stocks.

That number is not used uniformly, however, and you may find small-cap defined as below $1.5 billion. Market capitalization is calculated by multiplying the market price per share by the number of outstanding shares.

Small-cap stocks, which are tracked by the Russell 2000 Index, tend to be issued by young, potentially fast-growing companies. Over the long term -- though not in every period -- small-cap stocks as a group have produced stronger returns than any other investment category. Mutual funds that invest in this type of stock are known as small-cap funds.

Mentioned in ?
References in periodicals archive ?
Vanguard said that four international equity index funds broaden diversification and transition with the addition of small cap stocks, leading to all-capitalization benchmark.
Domestic demand and earnings, which are insulated from the global macroeconomic forces, are helping small cap stocks to do well, according to Alan Richardson, who is in charge of overseeing about USD82bn for Samsung Asset management.
The conventional wisdom is that stocks thrive when interest rates are rising, but research from Fidelity indicates that small cap stocks do especially well.
Summary: The rally in Asia small cap stocks continues across Asia with gains in the third quarter making up for the losses recorded in the second quarter.
Exchange traded funds offer a relatively convenient and cost-effective way to invest in small cap stocks.
By contrast, the Russell 2000 Index, which tracks small cap stocks, rose 21.
On the other hand, the very high profile and active individual investors should continue to remain cautious, meaning that the small cap stocks in general are likely to underperform for the time being, especially as they tend to underperform larger cap stocks with the onset of recession.
In one of TWST's insightful off-the-record pieces, TWST talks in confidence to leading analysts at brokerage firms about their views of top management in the medical technology: small cap stocks industry, and asks which of those CEOs are doing the best job in maximizing value for their shareholders.
THINK SMALL: After doing poorly for most of 1998, small cap stocks (that is, companies with market capitalization of less than $500 million) are all the rage again in investment circles and among financial pundits.
Summary: Data from Russell Indexes shows that small cap stocks continue to outperform large cap stocks in Asia.
Over this period, small cap stocks recorded gains 83 percent of the time in January, while it rose 67 percent of the time for the full year.