Oct 5, 2012

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Investing In Small Cap Value Stocks

Interested in Small Cap Value Stocks?

Small cap value stocks can both attract and repel investors with their price tags. Unfortunately, many new investors think that a small price tag on a stock means that it is a less profitable investment. They see the huge values of large and mega cap stocks and spend their limited funds buying just a few shares of these tremendously successful stocks.

In these cases, it is the size of the stock that makes it very difficult to secure significant returns. When you spend $80,000 on a $100 stock, you can only buy 800 shares. Even if that stock experiences an upward trend of a whole dollar in value, you only earn $800. Your earnings are directly affected by the number of shares that you hold as well as the value of those shares.

Take the same amount of money and invest it in small cap value stocks worth $10 a piece. You will be able to buy 8,000 shares. Should that stock gain a single dollar in value, you will become richer by $8,000. Even a much smaller gain would still earn you a return that might make it worth it to sell the stock for a profit.

The Best Small Cap Value Stocks

The value and worthiness of small cap value stocks can change from moment to moment. That is why it is important to have a subscription to some sort of newsletter that can inform you of these frequent changes. Here is a list of some small value cap stocks that are hot right now.

• Primerica, Inc.
• Community Health Systems, Inc.
• OfficeMax Incorporated
• Perry Ellis International Inc.
• Vishay Intertechnology Inc.
• Protective Life Corporation

Just a glance at their names reveals something important about small cap value stocks. They come from all over the stock market, originating in various industries and sectors. Many are from the technology sector. This is always an active sector. Additionally, notice the health care stock. These stocks are becoming major movers and shakers in all parts of the stock market. However, even more mundane companies such as OfficeMax make the list.

Investors should also look outside of single stocks. You can also take measured risks with index funds that focus their investments on small caps and mutual funds that do the same. The quality and potential of small cap value stocks can be found in many places.

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