Multiple Expansion in Microcap Stocks

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  • Multiple Expansion – When a stock’s price/earnings ratio increases based on investor willingness to place more value on the company’s earnings, resulting in a potential increase in share price.
  • Institutional Investors – When institutional investors take positions in a company, the share price can increase due to the additional buying pressure.
  • Indexes – When an index fund takes a position in a company, it can cause a nice pop in share price on buying day.

Original full length post is available at The Momentum Letter – Multiple Expansion and Stock Performance

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