Small-capitalization stock

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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.

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References in periodicals archive ?

With the Russell 2000 laboring almost 4% below its 200-day moving average and risk-off pall hanging over the market, TZA may be the best way to play small-cap stocks over the next several weeks, though data indicate the Direxion Dailly Small Cap Bull 3X Shares (NYSE:TNA) has recently taken in new money.

Maybe The Right Small-Cap ETF For The Moment

Calvasina believes small caps won't be any worse off than large caps in case there's a big unwind.

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Zurich Investments said that it is already in negotiations to replace its small caps manager.

Zurich Investments looking to replace its small caps manager

Chia, who was speaking to reporters at the launch of the 14th edition of RHB Top Malaysia Small Cap Companies 20 Jewels 2018, said the market would be eventually driven by the global and domestic macro environment for the rest of the year, which is deemed to be reasonable.

Small cap stocks to perform better after GE14

Among the best, at least when compared to similarly sized small cap stocks, according to a report by personal finance technology company SmartAsset.

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However, the return premium to small caps is unstable and fleeting, and due to a recent string of poor quarters, small-cap companies as a group today stand at a return disadvantage.

Small-Cap Equity

Small caps had a run of consecutive years of leadership, from 1979 through 1983, in the time before publication of the index.

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"If this does stabilise, we could see a turn, with small caps holding up better," Steven DeSanctis, small-cap strategist at Bank of America Merrill Lynch, told clients in a Friday note.

Small-caps can be big

"These factors appear to underscore the opportunity for active stock pickers in global small caps this year as macroeconomic influences recede and individual stock fundamentals come to the fore."

Small cap stocks outperforming large cap in 2014

While historically strong risk-adjusted returns are one of the reasons many investors are attracted to global small caps, the inefficiency of this asset class relative to large caps creates even greater opportunity.

The stock-picker's dream

On average, the R&D to sales ratio of small caps is roughly doubles that of large caps.

The relative performance of small cap firms and default risk across the business cycle: international evidence

Returns for the first three quarters of 2010 show a tug-of-war between large caps and small caps in the Russell Greater China Index.