There are two main small-cap indexes to bench mark small cap stocks.

S&P/ASX Small Ordinaries index
In Australia look at this index for the small companies on the ASX. It includes all companies in the S&P/ASX 300, excluding those in the S&P/ASX 100. It accounts for 12% (November 2020) of Australia’s equity market. Remember to make it even onto the small companies index these stocks are no longer small! They are quality companies often producing dividends.

The Russell 2000 index
Is the US small cap index. It shows you how small companies are performing in the US market.

Because Institutional investors have constraints

This is a big advantage to individuals! it means that the share price of these Small Caps has had to have doubled, tripled and quadrupled before a fund manager will invest capital in it, with mum and dad investors riding the company’s shares outstanding success wave to get there.

And this is precisely what happens. A few examples are:

• AVA Risk Group (AVA)
• Tassal (TGR)
• BigAirAfterpay (APT)
• Zip (Z1P)
• Austal (ASB)
• Clover (CLV)
• Macquarie Telecom (MAQ)
• Northern Star (NST)

$AVAThese are just a few of our outstanding shares that were all Under the Radar Report stocks when no-one else was covering them or investing in them.

After a period of fast growth, fund managers become interested in small companies when the market cap reaches a key tipping point.

By which time, the share price has boomed and then the company’s share price often booms again as more fund managers buy in to the future performance.

Under the Radar starts coverage on stocks well below the index market cap requirements of the S&P/ASX Small Ordinaries. We look at stocks with a market cap of between $50-500m

Small Caps are more volatile and there is “information risk”. In these companies their historic earnings performance can often bear little resemblance to their future earnings. And so you need good research before you invest in them.

Checking the balance sheet, p & l, and cash flow, a strong management team, a growing customer base and efficient systems. We do the research so you don’t have to.

Our track record speaks for itself.

We have delivered big returns for members. Click here.

Our Stock Success Rate

7/10 Stocks Outperform

Yes our research and stock picking is 100% independent. It’s not a press release prepared as a report! It’s serious hours of analyst time, researching and analysing each and every company and deciding if it is a quality investment opportunity.