It’s helpful to remember that many of today’s top mega-cap companies started as speculative small-cap stocks. But no matter the size of the company, the best stocks are the ones that continue to grow revenue and earnings.
Investors do have to deal with more volatility with small-cap stocks. Even small price moves in these stocks can lead to outsized results. That’s because, in many cases, these are companies that are not profitable, and some may be generating little to no revenue. In many cases, these names use debt to grow their businesses.
