Small-cap, high relative volume, and low price stocks can be defined as follows:
- Small-cap: These are stocks with a market capitalization between approximately $300 million to $2 billion12. They are typically considered to be younger companies with high growth potential, although they may also be well-established businesses with strong track records3.
- High Relative Volume: High relative volume indicates that the current trading volume is higher than average, suggesting increased market activity and potential price movement45. Relative volume is calculated by dividing the current volume by the average volume over a specified time period, such as 10 days5.
- Low Price: Low price stocks are those that trade at a relatively low price per share. This does not necessarily reflect the intrinsic value of the company, but rather the market's perception of its worth67. Low price stocks can be a result of various factors, including market conditions, company performance, or industry trends.
Investors interested in small-cap, high relative volume, and low price stocks should be aware of the associated risks and potential rewards. These stocks tend to be more volatile and can experience significant price swings due to the relatively small size of the company and the high level of investor interest29. However, they also have the potential for high growth, which can make them attractive investment opportunities31. It's important to conduct thorough research and consider the company's fundamentals, market conditions, and long-term prospects before investing in such stocks10.