Our regular readers have undoubtedly noticed that we have a tendency to discuss small cap stocks quite a bit on this site. Why? Because among the small cap universe some of the most inefficiently priced stocks can be found. They carry little in the way of name recognition for retail investors, and they don't move the dial enough for institutional investors (their budget calculators show that the returns just aren't worth it).
As such, for those who can read/interpret/understand financial statements, small cap stocks offer up some great opportunities. As Charlie Munger stated at the Wesco Financial meeting a few weeks ago:
Don't go after large areas. Don't try to figure out if Merck's pipeline is better than Pfizer's. It's too hard. Go to where there are market inefficiencies. You need an edge. To succeed, you need to go where the competition is low. That's the best advice I can give to small investors.
But while we've discussed stock investment research sources for individual investors, most of these sources are focused on large caps, as that's where the web traffic's at. One site, however, is devoted entirely to small caps: Agoracom is a site dedicated to providing information and promoting discussion of small cap stocks.
There is one caveat, however. Its business model derives revenue not from advertising, but from the small cap companies themselves. Many small caps struggle to get their names out there to investors, and so they are willing to pay Agoracom to discuss their companies. As such, it is unlikely you will find much in the way of negative information. Nevertheless, investors looking for info on small caps can find discussion forums, filings, quick facts and other useful information that could eventually lead to an investment decision.
If you use or have useful sources for small cap investing, please feel free to share them with others of like mind in the comments section below.