[Small cap versus mega-cap]

I have a question : Is it possible for the mega cap stocks like Apple and Microsoft to keep increasing their stock price and market cap at the same annual 20+ % rate they have been over the past 10-15 years ? Their market caps are already at 3trillion. If they were to grow at 20% annually for the next 10 years , they would be close to 20 trillion market cap in 10 years time ... can the total US and world economy accomodate such a rise ? If not, perhaps its better to invest in small cap stocks instead of mega-caps if one is going for maximum growth ? Just my thoughts, let me know what you think ...

[Finding Small-Cap Growth Stocks]

13 minutes ago, Value_Added said:

I don’t know the screens that finviz offers but I would screen for:

 

• +12% revenue growth
• +12% net income growth
• +12% operating cash growth (use FCF if they have the screen for it)
• +12% equity/book value growth
• ROIC of 12% or higher.
• Market cap <$1B
• Ev no more than 30% above market cap

That should find you a quality company with manageable debt.  Just remember that Covid really hammered these metrics for small businesses in 2020 so I would run your screen starting in 2020 or ending in 2019.  You probably aren’t going to find a lot of +25% early stage growers here because they won’t be able to show profit and operating cash/FCF growth.  This is more of a quality screen.

Whats stock screener do you use? I dont think Finviz has the options to screen for those parameters ...

[Finding Small-Cap Growth Stocks]

6 minutes ago, Value_Added said:

They certainly exist but quality comes at a price.  The micro and small cap market aren’t as overlooked anymore and anything of quality that’s proven itself and shows up on a screen for high quality metrics, will not come cheap unless there’s an event to make them cheap.  If they’re truly high quality, the current multiple may be okay given a long timeline to continue executing but you’d better have a good understanding before placing that bet because if you’re wrong, multiple contraction paired with falling metrics is an expensive mistake.

Ok. The problem I am facing now is that I CANT even find a substantial number of small-cap growth stocks to invest in. How do i go about finding them ? Any advice ?

[Finding Small-Cap Growth Stocks]

Hi, I was wondering if there was a methodology to consistently find quality small-cap growth stocks to invest in ? Currently , what I do is use a stock screener like FInviz. in Finviz, for example, I would input certain parameters like (EPS Growth Past 5 years > 25%) + (Sales Growth Past 5 Years >25%) and it would produce a list of stocks that fit these criteria. However, when I input these 2 criteria, I get a list of only 240 stocks. And when I dig further into the financials of these 240 stocks, I find almost zero stocks that would qualify as a quality investment. Usually either they are not profitable, or are overvalued or have low Return on Equity . Wonder why I find it so hard to find quality small cap growth stocks to invest in. Is my methodology wrong? Has anyone tried finding small-cap growth stocks before ? What is your method ? Thanks alot !

[30% Withholding Tax On Dividends For Non-US Persons]

13 minutes ago, pcech said:

Check, if there is a tax treaty between Singapore and US in this matter. The tax treaty may stipulate a lower rate.

Unfortunately, currently there is no tax treaty between Singapore and US ...

[30% Withholding Tax On Dividends For Non-US Persons]

Hi,

 

I am a citizen of Singapore who is interested in buying US stocks. However, just today I realised that there is a 30% withholding tax on dividends for non-US persons who buy American dividend-paying stocks. My question is : is it still worthwhile to buy and hold such stocks (American dividend-paying stocks) as a non-american considering there is a 30% tax on dividends? I am a value investor so dividends and reinvested dividends are very important to my long-run returns ... Thanks

[Lost Decade]

Hi, some commentators like Ray Dalio and Charlie Munger are predicting that we are entering a "lost decade" for stocks, where returns on indices like the S&P 500 might return close to 0% over a period of 10 years or so (just like in the period from around 2000 - 2010). Do you think this prediction will turn out to be true, and if so , is it still possible to generate high returns on equity investments during this "lost decade" . How do you go about doing that ? Thanks alot ...