Sep 9, 2012

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The Value Of Purchasing NASDAQ Small Cap Stocks

Why NASDAQ Small Cap Stocks Are Good Investments

NASDAQ small cap stocksA lot of investors are naturally attracted to large cap stocks rather than some of the NASDAQ small cap stocks. There is a good surface reason for this. The price of a large cap stock is usually much higher. This high price tag rightfully inspires confidence in the underlying company’s ability to weather any trouble and continue to be profitable.

However, it is important to keep a diverse portfolio and maintain a certain number of risky ventures among your holdings. NASDAQ small cap stocks may not be as proven as the larger cap stocks, but they also have potential for more growth. This potential keeps bringing investors back to these stocks.

A large cap stock may cost as much as $200 per share. Some of the mega cap stocks can cost you much more. If you have $100,000 to invest, then you will only be able to buy 500 shares of that stock. This is a measly amount when you think of how much money you have sunk into the investment. If that stock trends upward in value and gains a full dollar per share, you will only earn $500. You may have to wait a very long time for this stock to produce considerable profits.

Now imagine a NASDAQ small cap stock that costs only $10 per share. With your $100,000 investment, you can buy 10,000 shares. Should the stock gain a dollar in value, you would earn $10,000. Even if the stock only gained 10 cents in value; you would still see a return of $1,000. That is twice more than you would have seen with the large cap stock.

Some NASDAQ Small Cap Stocks

If this possible scenario motivates you to buy some of these stocks, consider the list below. It contains the names of some of the most popular small caps on the NASDAQ right now.

• Radcom — This Israeli corporation makes software for large computer networks.
• FSI International — This cleaning company makes high-tech equipment to clean semiconductors.
• Acme Packet, Inc. — This is a communications company that helps networks maintain connections globally.
• Radware Ltd. — They optimize data traffic for corporations that manage large computer networks.
• Spreadtrum — This company designs microchips for the wireless industry.

There are many others. You can break into this sector by studying these stocks first. They are some of the hottest NASDAQ small cap stocks around.

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