What are microcaps?
In Canada, a micro-capitalisation (or microcap) is a public company with a valuation of $ 300 million or less. Microcaps are essentially the smallest companies on the stock market.
According to Yahoo Finance, there are currently more than 2,400 companies in Canada that meet the definition of microcap. In North America, some 11,000 microcaps companies employ more than 2.8 million people, more than Google, IBM, Home Depot, Berkshire Hathaway, AT & T, Pfizer, Cisco, Microsoft, Boeing, General Electric and GM combined.
Some of the most successful companies have made their IPO debut as microcaps, including Wal-Mart, Netflix, Apple and Berkshire Hathaway. Also, many of the best investors we know today have started their careers investing in microcaps – think of Warren Buffett, Peter Lynch and Joel Greenblatt, among others.