Small-cap
Small-cap (small capitalisation) companies have a market capitalisation (total dollar value) of around US$300 million to US$2 billion. These companies are typically in the early stages of growth, and some may offer niche products, or operate in small markets. Examples of small-cap companies include La-Z-Boy (LZB), Sonos (SONO), Krispy Kreme (DNUT), and Beyond Meat (BYND).
Characteristics of small-cap companies
- High growth potential: Could have significant growth potential as they expand market share and develop their businesses
- Higher volatility: May tend to be more volatile and carry higher risk compared to mid-cap and large-cap companies due to their smaller size and being less established
- Less stability: Could be more impacted during economic downturns and market fluctuations
- Innovation: Many are innovative and agile, and are potentially able to adapt quickly to changing market conditions
A diversified investment portfolio may include a mix of large-cap, mid-cap, and small-cap stocks to balance risk and potential gains.
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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