Identifying Micro-Cap Investment Opportunities

San Diego-based private capital firm Tangiers Investment Group, LLC, specializes in strategic investments in small and micro-cap companies. As an employee-owned firm, Tangiers Investment Group, LLC, forms strong and flexible working and financial relationships with small businesses that result in accelerated growth and maximized profits.

Companies with market caps under $300 million but over $50 million are categorized as micro-caps on the stock exchange. These make up just under 50 percent of all publicly traded American companies. 

While these investments come with some risks, the Russell Microcap Index frequently outperforms the S&P 500. Also, investing in high-potential micro-cap companies is a strategic way to buy undervalued stock. A number of large-cap companies now valued at billions of dollars began as micro-caps.

Typically, there isn’t much information available about micro-cap companies, as they aren’t a main focus of the market. For interested investors, beyond the traditional metrics for analyzing return potential, understanding a micro-cap company’s business model is key. 

The performance of micro-cap companies is often dependent on a combination of internal and external factors. Investors should take note of significant changes in management, relevant legislation, and other potential advancements or threats.