Small-cap stocks are generally an ideal investment for investors which a high-risk appetite. Small-cap stocks have a market capitalization of under $3B.
These companies provide a higher rate of return as they are generally driven by high growth prospects. These shares are also more volatile compared to mid-cap or large-cap stocks.
The Vanguard Small Cap ETF [VB] which is a broad indicator of the small-cap space, declined over 3.3% last week. Here we look at small-cap stocks that underperformed the market significantly in the first month of Oct. 2018.
GoPro [GPRO] shares fell 13% last week to close trading at $6.26. The stock has burnt significant investor wealth over the last two years due to a decline in product shipments.
GoPro launched the highly anticipated Karma drone two years back but had to recall shipments shortly after the product launch. The company then decided to discontinue the production of Karma and exited the drone market.
Earlier this year, GoPro has launched several products across price points to target different customer segments. It will be interesting to see if this will improve device sales and result in revenue growth for the company.
Market Cap: $931.5M
Year-to-date Return: -17.3%
Last week decline: $139M
This telecom company has had a horrendous run in the last two years. Windstream [WIN] shares have declined 51% this year after slumping 76% in 2017. The stock declined 8.2% last week.
Some analysts believe the rising debt levels of Windstream might drive the firm to bankruptcy. Earlier this year, Michael Rollins from Citigroup [C], reduced Windstream’s price target to $1.
According to Rollins, Windstream is in a “precarious operating position and faces rising financial risks.”
Market Cap: $193.2M
Year-to-date Return: -51.35%
Last week decline: $17M
Similar to Windstream [WIN], Frontier Corp. [FTR] continues to underperform the markets significantly. The stock is up marginally by 0.7% this year. It has however declined 22% in 2016 and 87% last year. Shares fell 5% last week.
Though this initially resulted in cost savings, the cord-cutting phenomenon coupled with the demand for a cable-based internet impacted the company’s revenue.
FTR has to discontinue its dividend payouts and impose a reverse stock split to continue trading on NASDAQ.
Market Cap: $720.57M
Year-to-date Return: -0.74%
Last week decline: $37M
Pandora shares have had an impressive run in 2018, as the stock has risen close to 86%.
Market Cap: $2.41B
Year-to-date Return: 86%
Last week decline: $140M
Fitbit [FIT] too has burnt significant investor wealth in the last two years. This stock fell 73% in 2016 and 25% in 2017. Shares have slipped close to 12% in 2018 as well.
Fitbit shares were recently impacted by the launch of the Apple Watch Series 4. The company’s shares have declined driven by Fitbit’s loss in the wearable market. Fitbit shipments have fallen in a growing wearable space.
Market Cap: $1.24B
Year-to-date Return: -12%
Last week decline: $70M
3 Ways To Invest From Your Smartphone For Under $5
The numbers say 80% of millennials don’t invest in stocks.
Reason? Half say they don’t have money, one-third says it’s too early and another third says they don’t know how.
In addition to that, there’s demographic gap. “The average age of a financial advisor is 55,” said Douglas Boneparth, a New York City-based financial planner. “There are more financial advisors over the age of 70 than there are under 30.”
Despite these beliefs, you don’t really need much money, nor experience, to get started. (Just look at our fearless co-founder Odunayo Eweniyi and what she’s pulled off here)
Be that as it may, here are three ways to get started for $5 or less.
What: A micro-investment app (iOS and Android) with over 30 ETFs according to industry, sector and risk tolerance.
How it works: Download the app and choose your investment.
Minimum investment: $5
Cost: Fees range from $1 a month for accounts under $5,000 to 0.25% a year.
“We help people who don’t have a lot save money on a weekly basis,” CEO and co-founder Brandon Krieg said in one interview. “Stashers look like America, they look like people you meet every day: they are nurses and teachers and Uber and Lyft drivers.”
What: iOS and Android app.
How it works: Download the app and choose one of six index funds. When you buy, say a cup of coffee for $1.75, it rounds up the change to $2 and deposits the difference.
Minimum investment: $5
Cost: Just like Stash, fees range from $1 a month for accounts under $5,000 to 0.25% a year.
“We’re not trying to preach austerity to the client, because that’s a bummer,” CMO Manning Field says. “Some people will say, ‘Don’t have the cup of coffee.’ We’ll tell you to have the cup of coffee and invest along the way.”
What: A commission-free investment app (iOS and Android).
How it works: Download and start buying stocks.
Minimum investment: Whatever stock you want to buy.
And by the way, if you want to get a fast start on real estate, here’s Forbes’ list of nine REITs with yields between 8% and 10%.
CHART: How Blockchain Powers Bitcoin
Blockchain, Bitcoin. Bitcoin, blockchain.
The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.
But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.
VIDEO: Shark Tank’s Mr. Wonderful Demonstrates Compound Interest
How young should your children be when you start teaching them about money? How should I teach my children about money?
The key to children and money is explaining what it is to them early in life. Shark Tank’s Mr. Wonderful, Kevin O’Leary, answers all these questions with this tip on explaining compound interest to your kids.