Small Cap Large Growth

[robertbanking]

Hello you very intelligent and amazing people that make up these forums. I sincerely hope you are having a positive week and doing well.

I was kindly wondering for instance when a small cap stock, which is under £1 billion market cap, releases above guidance profits for a 6 month period it tends to move up alot higher than a large cap stock. Small cap stocks seem to move up in price more rapidly as most people know. I kindly wondered what are the factors that cause this please, is it due to having a smaller market cap and shareholder buys and sells move the price more rapidly please? I know it is more of a case of the technical aspects of the stock, but kindly wanted to know what specifically causes it. If anyone kindly had any thoughts on this i would be forever grateful and thankful.

I hope your investing continues to go amazing and hope you have a wonderful life. Wishing you all the best as always, stay happy and positive.

[robertbanking]

Hello you very wonderful individuals that make up this forum, i sincerely hope you are doing well. I kindly wondered if anyone could please respond to my post, even if its just a few sentences i would be forever grateful and it would mean the world to me. Sending you lots of good wishes and all the best.

[monabri]

Available research
It might be down to the level of market research on that stock by analysts. The smaller companies might not get the same degree of scrutiny as the bigger blue chips. Then when they post results better than expected, there might be a scramble to buy....(or the converse if results are poor=!!).

Liquidity
There is also a question of "liquidity" - who owns the shares and are there any for sale (supply and demand)?

Fear of Missing Out
Then there is the possibility of "here's a bright young company...it might be a possible takeover target...let's buy now!".

[tjh290633]

I agree with the point about liquidity. My wife tried to buy some shares in a company run by a friend. There were no shares available as they were all tightly held. Just as well as they went bust some time later.

They made equipment for the textile industry, which was in decline in Europe.

TJH