What factors do you look at when screening small cap stocks to potentially add to a portfolio?
As small caps are more risky are there additional screens you do in addition to what you would do in a large cap screening? say specific balance sheet items, CF items, EPS growth etc
Any insight appreciated. (Assume no specific sector here) just general rules.
Probably the single most important screen to run is to filter by market cap.
Rex you might find this a good read: https://www.chicagobooth.edu/~/media/FE874EE65F624AAEBD0166B1974FD74D.pdf
Piotroski’s F-score was devised to identify good value stocks from bad value stocks. Though this doesn’t totally apply to small cap necessarily, you might find some of the criteria used to identify good value might also be relevant to identify good value (or growth I suppose) small/micro caps.
Anyways, at the very least maybe just an interesting read!
Mega lol
Cheers Mambz, will take a look!
I only really buy small cap banks, so I can’t give any general advice. Small cap banks have very detailed financials, allowing very detailed screening.