Low cap

Screening Filters

1. Market Capitalization: 300M – 1.2B USD

   • Purpose: Target “low market capitalization” companies while avoiding extremely tiny, illiquid, or highly speculative names.
   • Rationale:
     • In practice, “low market cap” usually maps to small-cap (roughly a few hundred million to low single-digit billions).
     • Setting a minimum of $300M screens out micro- and nano-caps, which often have very low liquidity, higher manipulation risk, and poor disclosure.
     • Setting a maximum of $1.2B keeps the universe in the lower part of the small-cap spectrum, which is consistent with your request for low market cap stocks rather than mid- or large-caps.

2. Price: 5 – 20 USD

   • Purpose: Focus on reasonably priced, tradeable stocks and avoid penny stocks.
   • Rationale:
     • A minimum price of $5 excludes typical penny stocks, which often have extreme volatility, wide bid-ask spreads, and higher risk of delisting or manipulation.
     • A maximum price of $20 keeps the names in a “lower-priced” range that many investors associate with smaller or earlier-stage companies, while still being mainstream listings.

3. Monthly Average Dollar Volume: ≥ 500,000 USD

   • Purpose: Ensure that the low market cap names are still sufficiently liquid to enter and exit positions without excessive slippage.
   • Rationale:
     • A minimum of $500K traded per month filters out the most illiquid small caps, where even modest order sizes can move the price materially or be hard to fill.
     • This makes the results more practical for actual trading or investment, not just theoretical ideas.

4. Quarterly Revenue YoY Growth: ≥ 5%

   • Purpose: Tilt the search toward smaller companies that are at least growing, not stagnant or shrinking.
   • Rationale:
     • Low market cap alone can indicate either opportunity (early growth) or distress (business in decline).
     • Requiring at least 5% year-over-year revenue growth in the latest quarter helps bias the list toward companies that are expanding their top line, suggesting healthier underlying businesses or earlier-stage growth stories.

5. P/E (TTM): 8 – 25

   • Purpose: Avoid extremely overvalued or deeply distressed names while staying in a reasonable valuation band.
   • Rationale:
     • A minimum P/E of 8 screens out very low or negative P/Es often associated with serious business issues, accounting noise, or one-off events.
     • A maximum P/E of 25 helps avoid speculative, very richly priced names that may not be suitable if you are looking for relatively grounded small-cap opportunities rather than high-flying momentum plays.

Why Results Match Your Request

• The market cap band (300M–1.2B) directly targets low market capitalization companies, staying firmly in the small-cap segment and away from mid/large caps.
• Additional filters on price, liquidity, growth, and valuation refine this low market cap universe so that:
  • The names are tradeable (via price and dollar volume constraints),
  • The businesses show some growth (revenue YoY filter),
  • And valuations are within a reasonable fundamental range (P/E filter).

Altogether, these filters are designed to find practical, investable low-cap stocks, not just any tiny company on an exchange.