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 ?

'We continue to like Asian small-capitalization stocks as they are particularly exposed to the solid growth potential we expect from this region over the long term.

Positive sentiment on emerging markets seen

The USD69 billion Vanguard Emerging Markets Stock Index Fund, USD52 billion Vanguard Developed Markets Index Fund, USD20 billion Vanguard European Stock Index Fund, and USD6 billion Vanguard Pacific Stock Index Fund will move from FTSE benchmarks containing large- and mid-capitalization stocks to broader FTSE benchmarks that include large-, mid-, and small-capitalization stocks, as shown in the accompanying table.

Vanguard diversifies with 4 international equity index funds

Northern Trust Asset Management launched a fund for institutional investors that encompasses quality small-capitalization stocks across global developed equity markets.

Hot Off the Presses

Standard & Poor's Composite 1500 index, a measure of large-, mid- and small-capitalization stocks, showed a price gain of 13.7% for 2012.

Cable stocks rule S&P

Historically, what you found is that you've been able to get a premium from an investment standpoint if you had exposure to small-capitalization stocks and value stocks.

Shundrawn Thomas of northern trust on tilted indexing

Small-capitalization stocks climbed as better-than-expected new-home sales and encouraging second-quarter earnings emboldened investors to pile into riskier assets.

United States : Small Stock Focus Cal-Maine Hatches 12% Rise

Tsuyoshi Segawa, head of equity dealing at New Japan Securities Co., said institutional investors are showing a strong appetite for small-capitalization stocks.

Tokyo stocks close mixed

"The best buying opportunity may come after the beginning of the year," he says, "if Y2K fears temporarily depress the market." His favorite market sectors are those that have lagged: small-capitalization stocks, foreign stocks and real estate investment trusts (REITs).

Magical millennium tour

Research in financial economics suggests that market-wide information may impact the prices of large-capitalization stocks more quickly than small-capitalization stocks. In his seminal paper, Fisher (1966) points out that nonsynchronous trading can induce positive autocorrelation in individual stock returns.

Trading volume and firm size: a test of the information spillover hypothesis

I have since devoted my career to the unjustly maligned and investment-rich universe of small-capitalization stocks.

Buy big ... or get small

Global index provider MSCI classifies all of the private television companies in China and Hong Kong as small-capitalization stocks. MSCI also calculated the percentage of the Chinese and Hong Kong stock markets the TV industry represents.

Tuning in to China TV biz

As the stock market continues its meteoric rise, small-capitalization stocks have been like bell-bottom jeans and the pet rock: out of style.