What is a Microcap Stock?

Microcap stock is part of some of the best investment stories in the past 25 years. It started with investors who recognized the potential of a small-cap stock. Just think of being an early investor in companies like Amazon (NASDAQ:AMZN), which was a $7 stock in 1998, or Tesla (NASDAQ:TSLA), which had a market cap of just over $1 billion in 2010.

Micro Cap Stocks
Microcap stock is part of some of the best investment stories in the past 25 years.

A microcap stock is generally defined as a relatively small company with a market capitalization greater than $50 million, but less than $300 million. Whether a stock is classified as a microcap or not has nothing to do with its share price. It’s completely possible for a large-cap stock to trade for under $10 per share, just as it’s possible for a microcap stock to trade for several hundred dollars per share.

Instead, the classification is based on market capitalization, which is the entire market value of a company’s outstanding shares. The market capitalization, or market cap, is typically included in most stock quotes, but it can be calculated by multiplying a company’s number of outstanding shares by its current share price.

Because it’s based on the current share price, a company’s market capitalization fluctuates constantly. A stock is generally classified into one of the categories based on its market cap as of a certain date.

Investing in microcaps

Many microcaps trade on the pink sheets or OTCBB, which have lower listing standards than the NASDAQ and NYSE. Some stocks may be classified as microcap stocks based on the overall market value of their shares, but may have stable profits and trade on a major exchange. Although there is more risk but also higher reward with microcap stocks, you must look at the industries they are in to figure out the potential growth.

Multi Industry Micro Stock 

A company to have on your radar is USLG. USLG is a designer and leading manufacturer of commercial LED lighting products, automotive, RV, and marine electronics, and robotics using artificial intelligence. They have been evolving and expanding, since the company’s inception. Although they are only on the pink sheets currently, they are working toward the senior exchange. The industries they are a part of are thriving and hold long term upside. For example, the automotive industry isn’t going away anytime soon, and USLG stock factors in the opportunity it provides with aftermarket automotive accessories. Also, robotics being the inevitable future is a big part of USLG. Take a look at how you can take advantage of microcap stocks in robotics. 

Ready to invest?

Investors interested in buying microcap stocks should take their time when considering their options. By gaining a research advantage, we can invest in companies before most big investors get on board. Take advantage of jumping on an opportunity before it becomes out of reach.

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