Minor value

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A by-value is a share that is not the default values ( Engl. Blue chips counts). A by-value is therefore with regard to criteria such as company size, trading volume and market capitalization (Engl. Market capitalization , briefly market cap ) too small to be a default. Since the concept of the standard value is not exactly defined, this also applies to the concept of the secondary value.

In the case of secondary stocks, a distinction is also made between the following levels - according to decreasing values ​​with regard to the criteria used for standard stocks:

  • Large caps : high market value
  • Mid caps : medium-high market value, in Germany e.g. B. MDAX participants.
  • Small caps : low market value, in Germany e.g. B. SDAX participants and many stock corporations not represented in any index.
  • Micro Caps : Small values ​​that are also not represented in any index. This usually also includes so-called penny stocks .

There have been some attempts to assign small caps to these sub-terms based on the respective market value , but ultimately there is no generally accepted definition. The boundaries between these sub-terms are therefore fluid.

meaning

Since more than 95% of the listed stock corporations are small caps, the potential investor has a greater choice of stocks than standard stocks. However, the analysis of smaller companies is naturally more complex and sometimes more difficult, as their financial communication is usually less pronounced than with standard values. For many large investors, such as In addition, small caps, such as investment companies or institutional investors , are unsuitable due to their narrow market .

The “ size effect ” (also “small cap effect”) means that one can achieve higher profits by investing in small caps - while accepting higher risks . This theory is based on statistical studies of historical price data , the results of which are usually not transferable to the future.

literature

  • Sönke Knop, Axel Mühlhaus: Investing in Small Caps . Campus Verlag, 2002, ISBN 3-593-36995-8 .
  • Beate Sander: Stock picking with small caps . Stock exchange media, 2007, ISBN 3-938350-31-8 .
  • Rolf W. Banz: The Relationship Between Return and market value of common stocks . In: Journal of Financial Economics . tape 9 , 1981, pp. 3-18 .