Simply put, the
small cap market is huge. Nearly 8 out of 10 companies that publicly trade in
the United States have a market capitalization of less than $500 million. A
surprising 40% of the businesses that trade on Nasdaq have a market
capitalization of less than $250 million.
Yet these companies
get very little if any analyst research coverage on Wall Street. You may have
52 analysts covering a $468 billion company like Apple Computer Inc., but
practically no one covering the small cap company. The investment news media
consisting of broadcasts media like CNBC or the magazines and financial
newspapers also rarely mention small caps. As a result, the small cap’s stock
price rarely reflects the company’s future prospects.
Yet small companies
are the true leaders of innovation and creativity. Large companies are
bureaucratic monstrosities. Think of the film Office Space where computer
engineers stuck in cubicles feel their creativity is stifled while they are
focused on pleasing middle management writing Testing Procedure Specification
(TPS) reports. Large corporations have become totalitarian work environments
where the CEOs are acting as dictators looking over Stalinesque bureaucracies
and even their brightest staff members feel as if they are merely renting
themselves to the company for a living. The large organizational hierarchies of
big cap companies are slow in making decisions and require sticking to
established stagnant procedures. Startups require innovative entrepreneurs, and
that typically isn’t in a job description for a large company. An innovative
entrepreneur would most likely be deemed a threat by corporate middle
management.
Small cap companies
are hampered by little if any bureaucracy and this leads to rapid decision
making, fast adaptability to quick changing markets, and a willingness to take
on the risk of new ideas. Large companies sometimes throw large amounts of
money to innovate and get nowhere due to ineffective internal communication
within their own departments. Clear communication among internal staff and a
lack of funds triggers small companies to come up with different, unique,
solutions to solve the problems that lead to innovations.
Small cap
entrepreneurs are the visionary business people that do market research, create
business plans, seek out investors and financing, and then strive to create
products and services that utilize a country’s resources. They are the true job
creators, and not the management of large corporations that seek to enhance
profits by off-shoring labor or replacing people with automation. They are the
value waiting to be unlocked in the small cap market.
Let QualityStocks
become your portal to small cap investment success
QualityStocks can be
your first step to researching small companies on the leading edge of
entrepreneurial innovation.
For over 8 years,
QualityStocks free daily newsletter has been providing quality investment ideas
to small cap investors. Quality Stocks delivers the only newsletter tracking
the stock tips of hundreds of other investment newsletters, and providing a
‘One-Stop Look’ at the daily highlights of the small cap market. Once you begin
subscribing to the QualityStocks daily newsletter, you will wonder how you ever
managed without it.
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About QualityStocks
QualityStocks is committed to connecting subscribers with companies that have huge potential to succeed in the short and long-term future. We offer several ways for investors to find, evaluate, and learn more about investing in these companies.
QualityStocks is committed to connecting subscribers with companies that have huge potential to succeed in the short and long-term future. We offer several ways for investors to find, evaluate, and learn more about investing in these companies.
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