Paradigm
Capital
Management
Blog Post
Small Cap Stock Picker
- By Wilbur H. Stewart
- •
- 07 Dec, 2017
- •
You've decided that you want to invest in micro cap stocks and you want to know how to pick profitable company's?
Micro cap stocks tend not to be traded on the more common exchanges such as the NYSE or the NASDAQ but rather on 'over the counter" exchanges such as pink sheets and OTCBB and as a result it can be difficult to locate information about the company.
Although the information available can vary, you can find a list of all the small cap stocks available by going to the pink sheets website.The Securities and Exchange Commission (SEC) does not monitor these companies in the same way as other companies traded on the NYSE or the NASDAQ and only requires limited information from them in order to list.
Once you've identified some micro cap companies that you want to look into further it can become even harder as the information that is provided it can be difficult to verify the accuracy of the data and often the information provided is not relevant to what you are trying to find.
No matter what you are investing in, it is essential to conduct your due diligence. You will want to research the financial history of the company; have they ever declared bankruptcy as well as to evaluate the experience of management to ensure they have the required expertise in the relevant areas.
It is easy to become a victim of fraud when investing in small cap stocks because of the limited information available. It is important to know that sometimes the management of these companies will spread false rumours about financial matters or other matters relevant to the company to spread false hype to mislead investors. They can even reimburse financial advisors to recommend these stocks to you and you may have seen these already as spam emails in your inbox.
Another thing to be aware of when purchasing micro cap shares in that they are often illiquid and what this means that if you have a lot of shares and you need to sell them quickly for whatever reason there may not be a buyer to buy the shares at that price and you can end up selling your shares for much less and taking a loss. To help minimise this from occurring you need to make sure that you are well diversified and only invest what you can afford to lose.
Remember do not be dissuaded as all companies must begin somewhere and there are plenty of good companies to invest in. And one of them is Paradigm Capital Management Inc. Paradigm’s roots extend back to the early 1970s when Candace King Weir founded an institutional research boutique specializing in small-cap equities. Recognizing that small caps presented unique opportunities to capitalize on inefficiencies and valuation discrepancies, Paradigm Capital Management was established in the early 1990s.
To learn more about us please visit here: http://www.paradigmcapital.com/
Micro cap stocks tend not to be traded on the more common exchanges such as the NYSE or the NASDAQ but rather on 'over the counter" exchanges such as pink sheets and OTCBB and as a result it can be difficult to locate information about the company.
Although the information available can vary, you can find a list of all the small cap stocks available by going to the pink sheets website.The Securities and Exchange Commission (SEC) does not monitor these companies in the same way as other companies traded on the NYSE or the NASDAQ and only requires limited information from them in order to list.
Once you've identified some micro cap companies that you want to look into further it can become even harder as the information that is provided it can be difficult to verify the accuracy of the data and often the information provided is not relevant to what you are trying to find.
No matter what you are investing in, it is essential to conduct your due diligence. You will want to research the financial history of the company; have they ever declared bankruptcy as well as to evaluate the experience of management to ensure they have the required expertise in the relevant areas.
It is easy to become a victim of fraud when investing in small cap stocks because of the limited information available. It is important to know that sometimes the management of these companies will spread false rumours about financial matters or other matters relevant to the company to spread false hype to mislead investors. They can even reimburse financial advisors to recommend these stocks to you and you may have seen these already as spam emails in your inbox.
Another thing to be aware of when purchasing micro cap shares in that they are often illiquid and what this means that if you have a lot of shares and you need to sell them quickly for whatever reason there may not be a buyer to buy the shares at that price and you can end up selling your shares for much less and taking a loss. To help minimise this from occurring you need to make sure that you are well diversified and only invest what you can afford to lose.
Remember do not be dissuaded as all companies must begin somewhere and there are plenty of good companies to invest in. And one of them is Paradigm Capital Management Inc. Paradigm’s roots extend back to the early 1970s when Candace King Weir founded an institutional research boutique specializing in small-cap equities. Recognizing that small caps presented unique opportunities to capitalize on inefficiencies and valuation discrepancies, Paradigm Capital Management was established in the early 1990s.
To learn more about us please visit here: http://www.paradigmcapital.com/
