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Small-Cap Company : Definition & a Brief Summary

Definition of Small Cap Company

A Company with Small Cap Stock is known as a Small Cap Company.

What is a Small Cap Stock?

The Small Cap Stock is the stock of a company with market capitalization in the range of $250 million to $2 billion.

(This is an approximate figure as noted in the U.S. Securities and Exchange Commission website.)

Other Characteristics
  • The daily trading volumes are in good numbers not too high though.
  • The pricing of the small-cap stocks are generally in the medium scale.
  • Their revenues are not too high but in medium range as well as their assets and operations.
  • The investments in the stocks of small cap companies are considered less risky.
Examples of Small-Cap Companies
  • Coca-Cola Bottling Co. Consolidated - market cap $1.63bn 
  • iShares S&P India Nifty 50 Index Fund - market cap $821.03mn
  • QIWI plc - market cap $537.71mn
  • Hawkins, Inc. - market cap $361.97mn
  • Kirkland's, Inc. - market cap $292.14mn

Source: nasdaq.com (data as on 14th March 2016)

Key Concern Points of Small-Cap Company

  • High risk investment
  • Low reserves
  • Rather young company
  • High number of individual investors than institutional investors

Related Posts:
  • Mega Cap Company
  • Large Cap Company
  • Mid Cap Company
  • Micro Cap Company
  • Nano Cap Company

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