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How to spot the best small cap stocks

Small cap stocks are companies with a “market cap” (the value of shares they have outstanding) below $1 billion, or some other arbitrary figure.

Small cap stocks have the potential for large gains, but they are generally more volatile than large-cap stocks. Temporary setbacks, such as a poor quarterly earnings report …read more »

New Free Report: Commodity Investments: Fertilizer Stocks and Potash Stocks That Will Profit from Rising Food Demand

Get my latest buy/sell/hold advice on five commodity investments and my short- and long-term forecast for the fast-moving agricultural sector absolutely FREE

BHP Billiton’s (symbol BHP on New York) $38.6-billion takeover bid for Potash Corp. (symbol POT on Toronto) has attracted a lot of investor attention to commodity investments lately.

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Our investing advice on 2 expanding global stock market picks

A number of our Inner Circle members have asked our opinion on global stock market investing in recent months, particularly companies that operate in fast-growing emerging markets.

Some of these companies may not be well-known to North American investors. However, if it’s possible to invest in these stocks through North American …read more »

Investor Toolkit: How to make higher profits — with less risk — in technology stocks

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice …read more »

5 powerful stock trading tips for higher long-term returns

You can enhance your long-term investment results by following these 5 key stock trading tips. They’ve long been part of the advice we give in our investment services and newsletters, including Canadian Wealth Advisor, our advisory for conservative investing.

1. No stock can ever be so undervalued or desirable that it overcomes …read more »

This growth stock pick’s prudent U.S. expansion should pay off

Many Canadian firms have tried to expand into the U.S. over the years. Some, like Royal Bank of Canada (symbol RBC on Toronto) have had difficulty in the United States. Other companies’ expansion efforts have failed miserably.

Canadian Tire (symbol CTC.A on Toronto) provides a memorable example of a failed …read more »

This fertilizer stock’s diverse operations let it tap into exploding global demand

Wheat prices have almost doubled, from a low of $4.25 per bushel on June 9 of this year to a recent high of $8.15. That’s mainly because Russia banned wheat exports to preserve its stockpiles in the face of a severe drought and widespread wildfires.

Despite the jump, wheat is still …read more »

It’s a good time to look for hot small cap stocks

July 23, 2009
Posted by: Pat McKeough Filed in: Aggressive Investing
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Small caps are companies with a “market cap” (the value of shares they have outstanding) below $250 million, or some other arbitrary figure.

Many investors think of the “small cap group” as the place to look for aggressive investments, such as junior companies that will develop into seniors and make huge gains for investors. Some small caps will indeed turn out that way, but they’re a minority. In fact, small caps are a widely varied bunch.

The top small caps are well-established giants within small but growing fields. However, many small caps are start-ups that have yet to make their first profit. Some succeed brilliantly, and these are the hot small cap stocks we aim to help you spot in our Stock Pickers Digest newsletter, but lots of others go broke. Then too, some small caps are former large-cap companies that have terminal problems. They trade as small caps on their way to zero.

Do you have part of your portfolio that you play with? The part you're willing to be a little more aggressive with? Then let me recommend my Stock Pickers Digest newsletter. You get the stocks my proven Quick Profit/Value System ™ has identified as having the potential to give you 50% gains -- or more -- in 6 months or less. Click here to learn how you can get started right away.

Right now, small caps as a group offer above-average potential. That’s because small caps, good and bad, have fallen out of investor favour during the current stock-market decline. As a result, some offer tremendous value, and could turn out to be tomorrow’s hot small cap stocks.

Top small caps will likely pay off over time

Small-cap stocks are a lot riskier than large caps. They are also much more volatile. One bad quarter of earnings, or the loss of a major contract, for example, can quickly cut a firm’s share price. That’s why we view even the best small-caps as holdings for the aggressive component of your portfolio.

We always base our recommendations on a small cap stock’s investment quality. We look for sound companies that stand to benefit as the economy continues to improve. We also look for companies with proven management and long-term growth plans. It’s an approach based on company fundamentals, rather than trading or market timing.

That’s opposed to so-called concept stocks, which mainly include start-ups or companies that look to profit from next week’s or next year’s investor fad. These companies can put on a great performance in a good year, when they guess right. In the long run, though, they’re likely to cost you money.

We always advise investors not to overindulge in any one group of stocks. That’s especially true of small caps, which can be more volatile than other investments. But selected high-quality small-cap stocks can boost your portfolio returns. For our latest small cap stock picks, be sure to consult Stock Pickers Digest.

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