Methodology of Picking up 400 Small-cap Stocks
(All the financial data are sourced from Dion Global Solutions Ltd.) To emerge with “400 Small-caps” we have considered four factors. First factor is related to market data i.e. market capitalization; second and third factor is from profit and loss account that are sales and net profit; fourth is return to investors in terms of dividend. We ranked every data and then gave equal weight-age of 25 bps points to each parameter so that ranking does not get tilted due towards any one factor. One could wonder why we have taken dividend as one of the parameters. This is to safeguard that investor friendly companies should represent in our “400 Small-caps” list. It also gives effect of different face value. We took dividend as a percentage to ensure that face value (FV) of 1 or 2 put them at disadvantage over companies having face value (FV) of 10. Since we have run the query in first week of August 2017, all the data available of the companies during that period has been comprised in our study.