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Small Company Stocks will Outperform the Market in 2024, Survey Finds

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LOS ANGELES, April 17, 2024 — Seventy-five percent of investors say small public company stocks will outperform most major stock indexes in 2024, according to results of the 2024 Small Public Company Investor Sentiment Survey, conducted on behalf of SNN Incorporated, a multimedia financial news and publishing company, and PondelWilkinson, Inc., an investor relations and strategic public relations firm.

Of the investors surveyed, 74% say they are investing in companies valued between $50 and $300 million market capitalization, while 26% are buying stocks across all sizes.

“Three-quarters of those surveyed expect small public company stocks to outperform most major stock indexes in 2024, with about half expecting this stock category to outperform bigger companies this year,” said Robert Kraft, CEO of SNN Network, parent company of the Planet MicroCap Showcase being held in Las Vegas April 30 – May 2.

“While a dichotomy currently exists between those who are bullish on small public companies and those who are less so, as indicated by higher gains achieved thus far into 2024 in larger-cap indexes, investors surveyed view small company stocks as sought-after investments in 2024 and said they are sticking with their investment strategies,” Kraft added.

Other key survey findings include:

  • Gains: More than half of investors (52%) expect to increase their small company portfolio in 2024, after one quarter of responders (27%) reported gains of 20% or more from this segment in 2023.
  • Sector outlook: Technology (27%), natural resources and energy (19%), and healthcare and biotech (10%) represent the sectors investors are most bullish about for 2024. These industry favorites remain unchanged from prior surveys.
  • Risk tolerance: Ninety-one percent of investors have a “moderate- to high-risk” tolerance when investing in small public companies, 51% and 40%, respectively.
  • Buy or sell: Eighty-nine percent of investors say their general time horizon for holding small public company stocks is typically long- (more than 6 months) to very long-term (buy-and-hold), 50% and 39%, respectively.
  • Investment benchmarks: Seventy-six percent of survey respondents say they also are buying small public company stocks listed outside the U.S. Additionally, survey respondents cited management teams (38%) as the most important criteria for investing, followed by profitability (37%) and stock price (17%).

“As more investors become interested in small company stocks, it is critical that management teams communicate transparently, effectively and consistently,” said Roger Pondel, CEO of PondelWilkinson. “Where companies communicate their value propositions beyond traditional channels also is important, especially since the survey revealed a wide range of media that investors use to identify investing ideas, including social media platforms and increasingly, select participation at investor conferences and quality sponsored research.”

About the 2024 Small Public Company Investor Survey
The online survey was conducted in December 2023 to gauge investor sentiment as it pertains to small public companies valued at $300 million market capitalization and under. Seventy-seven percent of survey respondents categorize themselves as individual investors, followed by institutional investors (11%), family offices (8%) and wealth managers (4%). Four in 10 respondents (42%) have 20+ years of investing experience, followed by 10+ years (28%), 6-10 years (17%) and 1-5 years (13%).

About SNN Incorporated
SNN Incorporated is a global multimedia and publishing financial news investor portal covering the small-, micro- and nano-cap markets by providing news, insights, education tools and expert commentary. Visit https://www.youtube.com/@PlanetMicroCap to subscribe to Planet MicroCap’s YouTube Channel to receive notifications of new CEO interviews, as well as the latest episodes of the Planet MicroCap podcast.

About the Planet MicroCap Showcase
Hosted by SNN Inc., the Planet MicroCap Showcase is an annual 3-day event for the microcap investing community, comprised of company presentations, 1×1 meetings and educational panels. Click here for more information or follow Twitter X and YouTube for important updates.

About PondelWilkinson
Founded in 1968, PondelWilkinson Inc. is a national investor relations and strategic public relations consultancy. The firm represents a wide range of publicly traded, pre-public and privately owned companies, from startups to large caps, and develops programs targeting both Wall Street and Main Street. For more information, visit www.pondel.com. Follow PondelWilkinson on X at @PondelWilkinson or LinkedIn.

How PR Can Support Micro Cap and Small Cap Companies

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What Kermit the Frog and Microcap Companies Have in Common: It’s Not Easy…

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Pity Kermit the frog when he sang, It’s Not Easy Being Green.

We all know the tune. Now try singing that tune to yourself, quietly please, but exchange Kermit’s words with: It’s not easy being microcap. Respect is so hard to come by. It’s tough to get investors to listen. And people always call you ‘too small.’

It’s not easy being a microcap company.

It was never easy being a microcap company. And It got even a little tougher in the second half 2018, when, along with the market’s tumble, BofA Merrill Lynch quietly said it would no longer trade in stocks selling for $5 or below, with market caps lower than $300 million.

We even unofficially learned that Merrill distributed talking points to its wealth managers, saying penny stocks are illiquid and can be easily manipulated for fraudulent purposes, and that the asset class is rife with companies with shaky businesses.

How sad. While such negativity and bias against microcap companies may be appropriate for some, many microcap companies have solid management teams and business models… and deserve better. Hopefully in 2019, other brokerages will not follow Merrill.

It’s always been challenging for microcap companies to command the same degree of investor interest and respect as their bigger brethren. But with help from IR professionals, there are ways not only for microcap companies to command respect, but with a little patience, to enhance value as well. Some thoughts for the new year: 

— Carefully identify and attend select microcap conferences, even though there typically are fees to pay. 

— At those conferences, weed out the investors from those who are there selling services, then cultivate relationships and communicate with them regularly. 

— Issue corporate news on a regular basis to keep the company’s name in view, and think about conducting quarterly conference calls.

— Consider producing periodic podcasts and webinars to demonstrate industry leadership, then publicize those events. 

— Judiciously use social media, paying close attention to Reg FD. 

— Professionalize corporate communications, including having a great website, just like the bigger cap companies.

— Be transparent and apply sound corporate governance practices. 

— If you can get on the road occasionally and have cultivated enough investors who will take a one-on-one meeting, do so. 

— First and foremost, although last on this list, focus on profitably growing the business.

Roger Pondel, rpondel@pondel.com