Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
German American Bancorp has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 9.4% to $40.89 per share while the index has gained 7.5%.
Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names.
But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
German American Bancorp came out with quarterly earnings of $0.73 per share. This compares to earnings of $0.79 per share a year ago. These figures are adjusted for non-recurring items.
