The investor seeking big stock gains tend to gravitate towards small cap stocks. Small cap refers to publicly listed companies with market capitalization of under $3 billion. Because of their relatively modest annual sales, these companies have the ability to grow many times over. It is more realistic for a company with $50 million in annual revenue to expand faster than a company with $50 billion in annual sales.

When investing in small cap stocks, the investor wants a company that has the potential to successfully grow. The companies that can expand aggressively have undeniable offerings. Their products, services and technology are winning the company new clients. Their sales are growing faster than the overall markets in which they compete. Improvements are regularly made to their offerings to help them stay ahead of the competition.

These companies are enjoying pricing power and cost advantages relative to their peers. When looking at small cap stocks, the investors want to focus on companies that are current with all their filings as required by their respective stock exchange. With latest information on hand, particularly financial data, the investor can meaningfully evaluate the investment potential of these small cap stocks. Furthermore, a company that is up to date on their filings likely has positive news to report to investors.