The selection of equities, listed on NYSE and NASDAQ, is updated at market closure every night
The SmallCap selection, with market capitalization between $250 000 and $2 billion, rules out below-average performance and highest volatility levels
Stocks are screened for positive sales trends, cash conversion and shareholder equity
Sales
- As sales will vary from quarter to quarter, moving averages will signal positive trends over time
- A moving average over the past 5 reported quarters is a positive when higher than a 20-quarter (5-year) moving average
- The longer the trend in favor of the most recent quarters persists, the higher the score assigned to individual assets, screened forbest rankings
Cash generated
- Cash generation is targeted as key factor to support future growth
- Disruptive firms, which generate little or no cash, are ignored, because their market potential and profitability remain uncertain
- Cash generation is measured by a positive cash conversion ratio - Cash from Operations (CFO) > Net Earnings
Shareholder equity
- Increasing equity sets small-cap firms on a positive path for future expansion
- A moving average of shareholder equity over the past 5 reported quarters is a positive when higher than a 20-quarter (5-year) moving average
- The longer the trend in favor of the most recent quarters persists, the higher the score assigned to individual assets, screened for average and better rankings
The Vanguard S&P Small-Cap Growth ETF
Assets shown are ranked by high asset price momentum over the short term