This is a continuation from Categories of Stocks and Identifying Them Correctly for Diversification Purposes Part 1, where we discussed on the Cyclicality of Industry. In this part, we will cover Size next.
To recap, the 7 classifications are
1. Cyclicality of Industry
2. Size
3. Growth Potential / Maturity Level
4. Business Fundamentals
5. Dividend Levels
6. Economic Moats
7. Location of Markets
Size – Micro Cap, Small Cap, Mid Cap, Large Cap or Mega Cap
The company can also be classified by the size of its market capitalization (Stock Price x Shares Outstanding). Depending on the exchange, the values for classifying micro, small, mid, large and mega cap can be vastly different.
For US Listed Stocks
Micro Caps are generally penny stocks with a market cap of $50mil – $300mil e.g. Armour Residential REIT
Small Caps are generally small, new companies with a market cap of ......