One of the biggest advantages of investing in small-cap stocks is the opportunity to beat institutional investors. Because mutual funds have restrictions that limit them from buying large portions of any one issuer's outstanding shares,some mutual funds would not be able to give the small cap a meaningful position in the fund. To overcome these limitations, the fund would usually have to file with the SEC, which means tipping its hand and inflating the previously attractive price.
Forget Large-Caps, Small-Caps Are a Better Opportunity
“Small-caps look attractive to both investors and potential acquirers because of
their strong balance sheets and good earnings momentum. Unlike large caps,smaller companies have more room to cut costs to boost margins.”
Source: CNBC http://www.cnbc.com/id/100511994
Veru of Palisade Capital Management