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These five Canadian small cap companies could produce outsized returns — if you can handle the volatility

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Small caps are often more profitable for investors than large companies.

I have always loved investing in small cap stocks. Simply, not only are they more fun to analyze (who needs to read 40 analyst reports on BCE, anyways?), but they are also (often) more profitable for investors than large companies.

Because of our company’s ‘no-conflict’ policy, I can no longer invest in Canadian small caps. However, that doesn’t mean we can’t tell you about a few of our favourites, which we will discuss below. Keep in mind, always, that small companies can be inherently riskier than large companies. They do not have the executive depth, financial resources nor the cash flow large companies typically have. When buying small caps, your investment time frame should be longer, and you should go in expecting share-price volatility. Here are five of our Canadian favourites. All are in our Model Growth Portfolio for clients:

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