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    Taking risk, but with more checks and balances: 5 smallcap stocks with upside potential of up to 32%

    Synopsis

    After refusing to leave the party when nifty and senex corrected for the last two months, small cap stocks witnessed correction in the last three weeks. One trend which has appeared is that on the day when the small index is down, the breadth of the whole segment is extremely weak. It is an indication that investors should put more checks and balances while navigating the small cap space. Also beware of rude shocks which this segment of the market may witness given the fact there are more headwinds ahead.ET screener powered by Refinitiv’s Stock Report Plus applies different algorithms & filters to all BSE and NSE stocks, and lists stocks which fulfill the various criteria as specified into the algorithms & filters to find those which might help navigate the stock market.

    When it comes to equities, small caps are always the riskiest place to take exposure. There are two reasons for it, first a technical one. Low floating stock makes them prone to manipulation, small amounts of buying may lead to sharp spikes in prices. Second fundamental, until small cap companies are operating in very niche areas with a decent cash flow matrix, they have a high probability of it being prone to balance sheet shock due to any kind
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    The Economic Times