What is A Small Cap Stock?
A smallcap stock is generally a company with a market capitalization of between $300 million and $2 billion. One advantage of investing in small-cap stocks is the chance to do better than institutional investors. You see, mutual funds have limits on them from buying large portions of any one issuer's outstanding shares, so mutual funds would not be able to provide a small cap stock a meaningful position in their portfolio. To avoid limitations like this the mutual fund would have to file with the SEC that that would expose it's interest which could raise the stock price of the small-cap it is considering.