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Foolish Small Cap 8 Screen

Performance

  Foolish Small Cap 8 S&P 500
YTD Return: -31.6% 6.7%
Five Year Return: 6.9% 13.3%
Ten Year Return: 2.2% 5.9%
Inception: 9.4% 4.3%
Data as of 9/30/2014
The Foolish Small Cap 8 Screen represents AAII's interpretation of the investment approach and is not determined by the original strategist. The list of passing companies represents a hypothetical portfolio, which is used to track the screen’s performance on a chart.

Passing Companies

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Screening Criteria

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Chart

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Small-cap companies have long captured the attention of investors looking for tomorrow's market heavyweight. However, with thousands of small caps out there, finding the most promising firms that warrant further research is a daunting task.

Stock screening allows you to winnow the universe of companies down to a more manageable group that you can then analyze more closely. How can you screen for small caps?

One method was derived by David and Tom Gardner, founders of the Motley Fool. The methodology—the Foolish 8 small-cap investing system—looks for profitable and rapidly growing small companies with strong price momentum.

The attraction of small caps is their potential to become large companies, with their share price growing in the process. However, the risks—the greatest of which is that they fail—eliminate them from consideration by many individual investors.

Small-cap companies also do not garner the attention of the financial media or analysts that larger firms do. However, the small-cap Foolish 8 strategy is partly based upon the premise that the lack of coverage and interest in small-cap companies presents a better opportunity to locate undiscovered, attractive investment candidates.

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