Enterprising Investor
Practical analysis for investment professionals

small cap


Small Caps, Large Caps, and Interest Rates

The relationship between stocks and interest rates is not reliably stable. There are periods when equities are highly rate sensitive, and periods when they aren't.

Concerned About Market Concentration and Lofty Valuations? Consider Small Caps

Investors are showing increased concern about large-cap stocks due to high market concentration and lofty stock valuations. Other factors combine to make a compelling case for small caps.

Coiled Tight: Smaller Companies Are Primed for Outperformance

Small-cap companies are poised for a rebound. The sector is best approached through an active investment strategy where expertise and a deep understanding of the individual businesses and their risk-and-reward characteristics are necessary for success.

Can Investor Activism Boost Small-Cap Stock Performance?

In the Financial Analysts Journal, Emmanuel R. Pezier and Paolo F. Volpin analyze a private dataset of a UK fund’s engagements with small-cap newly public firms and demonstrate that “behind-the-scenes” engagements resulted in 8% to 10% in cumulative abnormal returns.

Trick or Treat? Bobbing for Multibaggers in the Small-Cap Market

Small-cap investing is a “negative art.” But in addition to steering clear of losers, small-cap investors have to demonstrate the “positive art” of picking winners.

Small Caps: Party Like It’s 2000?

The legendary musician Prince exhorted us to “Party like it’s 1999,” but today, as a small-cap stock investor, I’d flip the calendar one year ahead, to 2000.

The Case Against Small Caps

While most of us may enjoy rooting for the Davids, we're probably better off betting on the Goliaths. Nicolas Rabener explains.

Factor Investing in Micro and Small Caps

Does factor investing in micro- and small-cap stocks in the United States offer any additional alpha?

Leveraging Active Investing with Small-Cap Stocks

Elizabeth M. Lilly, CFA, thinks that small-cap stock investing is an excellent way to leverage active management. If you do the research.

Investing in Small-Cap Biotech through Hedge Funds

After analyzing small-cap biotech data from 2007 on, Akash Goyal has found that higher hedge fund ownership is positively correlated with forward returns and that stocks with higher short interest are correlated with negative forward returns.