The Goldman Small Cap Research due diligence and stock selection model is based upon the profiling of exciting small cap and microcap companies. Given that the small cap and microcap world carries greater risks than larger capitalization stocks our analysts enlist specific coverage criteria that include a combination of fundamental and technical analysis characteristics, along with key intangibles. By incorporating the strategies successfully used by founder Rob Goldman as a mutual fund and small cap money manager, our subscribers are introduced to unique market insights, approaches, and stocks.
Our sponsored or “paid” Opportunity Research format seeks to provide research coverage and visibility to an underserved market. In most cases, these early-stage companies have reached or could soon reach an inflection point in their business models and reflect these characteristics:
Few investment bank research departments cover small cap and microcap companies unless they have an existing corporate finance relationship or coverage in a specific industry segment. This has resulted in thousands of “orphaned” stocks currently trading in U.S. markets, with no coverage and/or and little investor awareness. One quip on Wall Street is that many of these stocks “trade by appointment.”
Via this format, we routinely produce research reports, updates, trade alerts, CEO interviews, snapshots, and articles. This diverse approach seeks to enhance the limited visibility that hampers stocks' capital appreciation potential and companies’ abilities to increase the value of their firms via future financings, M&A, or other transactions. Without our research coverage, existing shareholders have access to limited information on company progress and potential investors may never find out about a Firm’s exciting prospects. These stocks typically trade on the OTC markets but can also trade on the NYSE or the NASDAQ, and carry above-average risk profiles, due to their early-stage fundamentals and trading volatility, but can offer greater upside as well.
Investors should view these covered stocks as publicly-traded venture capital due to their high risk, high reward, and lower history of success than their larger, publicly traded brethren.