How to spot the next big thing

Roger Montgomery

Montgomery Investment Management

Some simple rules can help identify small-cap companies with big prospects. Although many investors believe there is more risk because the companies are smaller and the shares more volatile, the risks of an individual failure can be mitigated by focusing on quality and value, and by diversifying across a number of stocks. Because smaller companies have a lower base, there is simply more growth potential than larger companies. Another advantage of investing in smaller companies is that they tend to be less well researched than their larger peers. This is because analysts typically work for brokers who generate more brokerage from trading the large-cap companies. This dynamic has evolved because large companies are more liquid and fund managers must restrict their efforts to companies they can trade large positions – which have a meaningful impact on returns – in and out of easily. Read the full story to find out how to identify great companies, includes 3 ASX-listed examples. (VIEW LINK)


Roger Montgomery
Chief Investment Officer
Montgomery Investment Management

Roger Montgomery founded Montgomery Investment Management, www.montinvest.com in 2010. Roger brings more than two decades of investment, financial market experience and knowledge. Roger also authored the best-selling investment book, Value.able.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.