Small companies with market values under $50 million tend to grow faster as investors look for higher returns amid improving market conditions. Insider Monkey looks at the 10 Best Nano Cap Stocks to Buy in 2021. The reason why nano cap stocks are undervalued is that they tend to have reporting gaps that are hard to find by financial analysts. Some firms also have unaudited documents that are difficult to decipher. Eugene Fama and Kenneth French, professors of finance at the University of Chicago, have studied the small-cap effect and its effect on the stock market. Their model, which is based on statistical data, helps investors identify which companies should be evaluated and which should not. The argument in favor of investing in small firms is that they offer better returns and are more likely to provide smaller investors with better returns. One thing to keep in mind is that smaller companies are more vulnerable to changes in economic conditions. For instance, they are more likely to be shut down if a financial crisis hits. In terms of nano cap stocks, here are 10 names to buy in 2021. Ever-Glory International Group, Inc. is a China-based fashion apparel retailer that offers a variety of sub-brands. It also has operations in more than 20 provinces across the country.
China-based Happiness Biotech Group is a dietary supplement producer that focuses on the development, manufacturing, and marketing of various Chinese herbal products. Four Seasons Education is a China-based educational company that provides after-school math and other after-school programs. It operates in more than 11 cities across the country. Virco is a furniture manufacturer that mainly serves the educational market. It offers various office furniture products such as chairs, tables, and other administrative equipment.
Sotherly Hotels Inc. is a real estate investment trust that focuses on owning and operating upscale hotels. Its portfolio includes properties with names such as Holiday Inn, Holiday Inn Express, and Best Western Plus. Read Insider Monkey’s original article The 10 Best Nano Cap Stocks to Buy in 2021 for the full information.