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small cap Archives

What is a Small Cap Stock?

Despite what the moniker implies, small cap stocks are the ticket to big returns in today’s stock market environment.

A small cap stock is one that has a market cap of $300 million to $2 billion. That’s the total value of the company’s shares. These stocks may be in biotech or cloud computing, but don’t discount traditional businesses.

A lot of very successful small cap investments come from very basic business models. The corner convenience store, the healthy food manufacturer, the high-volume concrete company, the water refill service … a lot of money can be made by keeping things simple, establishing large positions in small companies with proven business models, and being patient as they grow and/or are bought out by a larger competitor who can improve its own business by a rapid-growth tuck-in acquisition.

And yes, these stocks have just as much, if not more, potential as larger businesses. In fact, the average annual return in the S&P 600 Small-Cap Index over the past 20 years is 10.5%, compared to a 7.9% annual return in the S&P 500 during that time. The numbers don’t lie: these lesser-known stocks are, historically, better performers than large-cap stocks.

Investing in a small cap stock is a good way to earn huge returns. And the smallest of these companies often have the most potential for growth. It’s worth noting, however, that they also carry plenty of risk.

Anytime you buy shares of a small, little-known company, there are a bevy of unknowns. It’s impossible to take the risk completely out of small-cap stock investing. But there are ways to minimize those risks without sacrificing potential profits.

To learn more and start expanding your investing options, download our FREE report, 3 Small-Cap Stocks That Can Work Now Despite COVID-19, right now.

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Cabot Early Opportunities Special Bulletin

March 2, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

C3.ai (AI) reported Q4 results yesterday – its first as a public company – that came in ahead of expectations but didn’t offer enough about future growth to support the stock’s valuation. Revenue in the quarter was up 19% to $49.1 million while subscription jumped...
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Cabot Small-Cap Confidential Special Bulletin

March 1, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Cardlytics (CDLX) reported Q4 2020 numbers this morning that surpassed revenue expectations by roughly 10% and missed modestly on earnings. Revenue was down 3.2% to $67.1 million (beating by $6.2 million) while adjusted EPS of -$0.05 missed by $0.02. Management gave 2021 guidance that for...
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Cabot Stock of the Week 337

From the Cabot Stock of the Week 337 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

While some segments of the broad market have experienced a sharp correction over the past month (growth stocks in particular), the broad market has not fallen apart; in fact, many indexes hit new highs just last week. And, of course, today’s big jump rather...
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The Best Investment Sites to Research Stocks

The Best Investment Sites to Research Stocks

From the issue of |by Cabot Wealth Network|How To Invest

This list of the best investment sites to research stocks aims to help individual investors navigate the sea of stock-related information on the web.
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Cabot Turnaround Letter Weekly Update

February 26, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes, the podcast and the Catalyst Report.
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Cabot Early Opportunities Special Bulletin

February 26, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

Arcosa (ACA) released an uninspiring report on Wednesday that was particularly ill-timed given yesterday’s market retreat. The company missed across the board. Revenue was up 2.7% to $459 million, missing by $4.7 million while adjusted EPS of $0.33 missed by $0.08. Guidance for 2021 missed...
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Cabot Small-Cap Confidential Special Bulletin

February 26, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Personalis (PSNL) released preliminary Q4 results on January 11 and the official release after the close yesterday offered no surprises. Personalis (PSNL) Moves To SELL
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VIDEO: Cautious on Growth Stocks | Cabot Weekly Review

From the issue of |by Mike Cintolo|Stock Market |

In this week's video, Mike Cintolo is getting cautious, at least when it comes to growth stocks — he's certainly not selling wholesale, but for the first time in four months he's seeing some real breakdowns among leaders, so he's pared back a bit.
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Cabot Prime Week Ending February 26, 2021

From the Cabot Prime Week Ending February 26, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Cabot Prime Pro Week Ending February 26, 2021

From the Cabot Prime Pro Week Ending February 26, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Cabot Growth Investor 1466

From the Cabot Growth Investor 1466 issue of Cabot Growth Investor|by Mike Cintolo|Growth Stocks

More Cracks Appear At the start of November we saw a couple of blastoff-type indicators flash green (like the Three Day Thrust rule), and that turned out to be the start of a powerful intermediate-term advance. During the next two-plus months, progress was relative there...
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Cabot Small-Cap Confidential Weekly Update

February 25, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

The big picture for the market is that the uptrend is intact but under the surface we’re continuing to see pockets of turbulence. While the S&P 500 is just 2% off its high from last week and the S&P 600 Small Cap Index a..
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Cabot Small-Cap Confidential Special Bulletin

February 24, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Sprout Social (SPT) reported Q4 results yesterday that surpassed expectations. Revenue was up 32.6% to $37.3 million (beating by $1.4 million) while adjusted EPS of -$0.06 beat by $0.05. Guidance for 2021 looks solid with management calling for 2021 revenue of $172.5 million (up modestly...
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Cabot Marijuana Investor 221

From the Cabot Marijuana Investor 221 issue of Cabot Marijuana Investor|by Timothy Lutts|Stock Market

“Legal Weed Stocks Dip Despite New Jersey Governor Signing Recreational Cannabis Bill Into Law” That was the headline on one of my news sources yesterday morning, implying that the action of the stocks in light of that legalization event was somehow illogical. But as know...
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Cabot Early Opportunities Special Bulletin

February 24, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

Upwork (UPWK) reported Q4 results yesterday that surpassed expectations on the top and bottom lines. Revenue was up 32% to $106.2 million (beating by $8.8 million) while adjusted EPS of $0.06 beat by $0.06. Guidance for 2021 also surpassed consensus.
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Cabot Undervalued Stocks Advisor Weekly Update

February 24, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

The stock market is clearly accelerating the “reopening” trade. Small cap and cyclical stocks as well as commodity prices are surging, interest rates continue to tick up (the 10-year Treasury yield is now 1.38%, up from 0.92% at year-end), and novel financial vehicles SPACs,...
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Cabot Turnaround Letter 321

From the Cabot Turnaround Letter 321 issue of Cabot Turnaround Letter|by Bruce Kaser|Value Investing

We are modestly optimistic on energy prices – domestic production will likely remain subdued while global demand has essentially returned to pre-pandemic levels even though some petroleum-driven demand for gasoline and jet fuel hasn’t fully recovered yet.
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Cabot Early Opportunities Special Bulletin

February 23, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

Last week wasn’t great for growth stocks and so far, this week is just plain awful. The primary culprits are known; risk of inflation and higher interest rates have pushed cyclical stocks up and growth stocks down (generally speaking).
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Cabot Undervalued Stocks Advisor Special Bulletin

February 23, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

With the shares continuing to surge past our recently raised 65 price target, and now being priced at a premium to even our upgraded valuation metrics
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Cabot Stock of the Week 336

From the Cabot Stock of the Week 336 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

With this week’s recommendation, I’m swinging back to the more conservative side with a solid technology company poised for big gains from the 5G communications rollout.
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