FAQ

We are paid neither by the companies nor the investor relations firms. We do our research and analyses ourselves, and do not rely on the tips of others. Our team of stocks analysts are experts in the field, and know how and where to source good information. There are many newsletters and message boards out there claiming that their information is “real,” but most of these newsletters are “hired hands” masquerading as authorities on stocks investments. Like you, we’re investors ourselves and we understand the need for honest, credible information.

How do you select your stocks?

There are many ways, including simple ones, of choosing stocks. Each day, our entire team of stocks analysts pore over the thousands of stocks on the OTCBB and the Pink Sheets, as well as those on the major stock exchanges, looking for diamonds in the rough.

We choose to do our selection the hard way – through comprehensive research, financial number crunching using technical financial ratios, fundamental analyses of quantitative and qualitative factors, and statistical predictions.

Only the stocks that we believe have a real potential for growth and price appreciation get posted on our website and in our newsletter. Each company goes through a thorough analysis process and only the ones that meet our high standards of excellence are chosen, so that you’ll get the best and timely information.

Why should I put my money in Small Caps and Micro Caps?
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One of the advantages that investing in Small Caps and Micro Caps can give you is the chance to be a part of a small, rising company with a huge growth potential that large companies, because of their size, cannot do. Because the shares are cheaper, they can grow in ways that big companies would find impossible to match. When a company’s market capitalization becomes big, say in the $1 billion to $2 billion range, its stocks would be too high-priced to double in size and price the way small caps and micro caps stocks can.

Another advantage, and a very important one, is that many of the small caps and micro caps companies, because there is relatively little information about them, remain undiscovered and under reported. This results in a high probability that the Small Caps stocks are underpriced because the market knows very little about them. For you, the investor, this is an opportunity to profit well if you’re able to buy into the company before it gets discovered. We help you by giving you the lead about these small, promising companies that are often ignored by analysts and professional investors.

Why should I subscribe to the SmallCapProfits.net Newsletter?

Making the right choice as to what stocks to invest in requires a lot of hard work. This means spending long hours on your computer mining the internet for information about each company, learning valuation and analysis techniques – and there are many – and applying each one to each company, computing financial ratios and growth rates, and studying the company’s trends over several years as well as industry trends. You can easily spend several days of research and analysis on one company alone, because information about many small caps and micro caps companies is hard to find. While you may be able to get information on financial ratios and growth rates for large companies, there are hardly any for small ones. In addition, very few analysts report on the small companies that remain undiscovered, so it is difficult to find expert opinion about them.

All that work of researching, number crunching and analyzing – that’s what we specialize in. By choosing to subscribe to our Newsletter, you’ll become a part of a select circle that’s privy to our exclusive information. We’ll do all the tedious work that you’ll find hard to do and provide you with the expert opinion that you’re missing, and which will give you the financial advantage of being able to get the good companies’ stocks before others do. 

Check it out by subscribing to our Newsletter today, and see how much you can benefit from the information that we have gathered and analyzed. You’ll get only the best and timely information, and we’re sure you can make sound, profitable decisions and investments from our recommendations. Don’t wait too long, because this is offer is free for a limited time only.

More Stock Questions

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What are Small Cap Stocks?

The term refers to stocks with a small market capitalization, between US $250 million and $2 billion. Stocks with a market cap below $250 million are referred to as Micro Caps, and those below $50 million are called Nano Caps. Small Cap stocks can trade on any exchange although a majority of them are found on the Nasdaq or the OTCBB because of more lenient listing requirements. It is important to make the distinction between Small Caps and Penny Stocks. You can be a Small Cap without being a Penny Stock. There are plenty of Small Caps trading at more than $1 per share, with more liquidity than the average Penny Stock.

Why Should I invest in them?
Small Cap stocks have a bad reputation. The media usually focuses on the negative side of Small Caps, saying they are risky, frequently fraudulent and lacking in quality that investors should demand in a company. Certainly these are all valid concerns for any company, but in the wake of the Enron and Worldcom scandals, there is certainly an argument that company size is by no means the only factor when it comes to getting scammed.
The good news is, Small Caps are not as risky an investment when you have the right advice. And the best part is, Small Caps themselves can actually produce a higher percentage gain on your investment than most Large Caps. Why? Because Small Caps are just that, companies with small total values, they have the ability to grow in ways that are simply impossible for large companies. A large company, one with a market cap in the $1 billion to $2 billion range doesn't have the same potential to double in size as a company with a $500 million market cap.

To learn more about Small Caps and why you should invest, please see our About page.

  

What are the risks? 
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As with any investment venture, you are always taking a risk when investing in stocks. Those risks of course can be minimalized by the use of quality financial guides and advice, but they will still be there.
As far as Small Caps go, often times much of their worth is based on their propensity to generate cash, but they have yet to scale their business model. This is where much of the risk comes in. Not many companies can replicate what U.S. retail giant Wal-Mart has done, expanding from essentially a mom-and-pop store in Arkansas to a nation-wide chain with thousands of locations. Small Caps are also more susceptible to volatility, simply due to their size - it takes less volume to move prices. It's common for a Small Cap to fluctuate 5% or more in a single trading day, something some investors simply cannot stomach.

While yes, this does create risk. This also creates a large potential for solid gains.

Do Mutual Funds invest in Small Caps?
Generally, no, most Mutual Funds don't invest in them. It isn't uncommon for Mutual Funds to invest hundreds of millions of dollars in one company. Most Small Caps don't have the market cap to support this size of investment. In order to buy a position large enough to make a difference to their fund's performance, a fund manager would have to buy 20% or more of the company. The SEC places heavy regulations on Mutual Funds that make it difficult for funds to establish positions of this size. This gives an advantage to individual investors who have the ability to spot promising companies and get in before the institutional investors do.
 
Investing Questions:

Where is the best place to buy/trade stocks?
You can buy and trade Small Cap stocks through most brokers; however, we generally do not recommend any specific brokers. You should do as much research as possible though, and try to find a broker that you are comfortable with.

When investing, how much should I invest?
Despite the fact that Small Caps demonstrate attractive characteristics, there is a flip side. The money you invest in Small Caps should be money you can expose to a much higher degree of risk than that of proven cash-generating machines like Large Caps and Blue Chips. The actual amount of money you invest though is entirely up to your level of capability, and should be done so on a discretionary basis (i.e. if you need your car to get to work, then don't invest the car).

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Where can I find definitions of financial terms and meanings?
One of the best places on the Internet to find meanings and definitions of financial terms is Investopedia.com.

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