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Irish small cap stocks

Which small cap stocks are listed on the Euronext Dublin and should you invest?

The term small cap stocks are more commonly used overseas in places such as the US, but you could have also heard the phrase in Ireland too. So what are Irish small cap stocks?

What are small cap stocks?

“Small cap stocks” is a loose term for cheap, low-priced shares of small, often newly listed companies. There are a few different ways to define Irish small cap stocks. Some definitions say these are listed companies with a market cap of less than €50 million, which is why small-cap stocks are sometimes referred to as penny stocks in Ireland. Small cap stocks can also mean stocks with a share price of less than €5. However, this is a rather vague definition as some blue-chip stocks have share prices below €5 too.

Investors are often attracted to Irish small-cap stocks for their cheap prices and potential growth opportunities, though there are risks involved, too.

Some of the typical characteristics of a small-cap stock include:

  1. Small company
  2. Market cap below €50 million
  3. Newer company recently listed
  4. Share price below €5
  5. Limited financial track record
  6. Doesn’t pay dividends

How to buy small cap shares in Ireland

  1. Choose a stock trading platform. If you’re a beginner, our table below can help you choose.
  2. Open your account. You’ll need your ID, bank details and tax information.
  3. Confirm your payment details. You’ll need to fund your account with a bank transfer, debit card or credit card.
  4. Find the stocks you want to buy. Search the platform and buy your stocks. It’s that simple.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

Compare stock trading platforms to buy small cap stocks

1 - 6 of 6
Name Product Brokerage Fee Markets What you can trade?
eToro
IE stocks: No

US stocks: $0
Global
Stocks, ETFs, Currencies, CFDs, Indices, Commodities, Cryptocurrencies
Investing carries a risk of loss
Trade more than 1,000 stocks globally with eToro's social trading and investment platform
Saxo Markets
IE stocks: €12

US stocks: US$7
Global
Stocks, ETFs, Options, Futures, Bonds, Currencies, CFDs, Commodities, Cryptocurrencies
Investing carries a risk of loss
Saxo Markets provides an online platform for trading stocks, shares, CFDs, and forex around the world
DEGIRO
IE stocks: €2

US stocks: $0
Global
Stocks, ETFs, Funds, Options, Futures, Bonds, Cryptocurrencies
Investing carries a risk of loss
Degiro's platform can help new and seasoned investors access 50+ global exchanges with low fees
Zacks Trade
IE stocks: No

US stocks: US$1
Global
Stocks, ETFs, Funds, Options, Bonds
Investing carries a risk of loss
The Zachs Trade platform offers stocks, ETFs, bonds, options, and more with access to more than 90 exchanges worldwide
Freedom Finance
IE stocks: €2

US stocks: US$2
Global
Stocks, ETFs, Options, Futures, Bonds
Investing carries a risk of loss
Capital.com
IE stocks: No

US stocks: €0
Global
Stocks, ETFs, Currencies
Investing carries a risk of loss
Access thousands of the world's leading indices, commodities, cryptocurrencies and shares on a single platform.
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Compare up to 4 providers

Pros and cons of small cap shares

Pros

  • Low prices. Because they’re low priced, investors can hold a diversified portfolio of penny stock companies without needing to spend as much as they typically would.
  • Growth opportunity. Small-cap, newly listed companies can often present great growth opportunities if you pick the right ones. However, it could be a bumpy ride to the top.
  • Thrilling. Small-cap stocks often see their share prices change significantly in little time, which can be exciting and thrilling for investors with a high-risk tolerance.
  • Day trading. Because of their large price swings, penny stocks are often used by active day traders.

Cons

  • High risk. Small cap stocks are high-risk investments compared to other listed companies and ETFs with a longer financial track record. Not all companies that list on an exchange do well and a lot of small-cap stocks never become anything more than a small cap stock.
  • Very volatile. Small cap stocks often experience extreme stock price highs and lows within a matter of days (or even within the same day).
  • No income. Smallcap stocks rarely pay any dividends, as all revenue is usually reinvested back into the company to help it grow.

Small cap stocks vs. blue-chip stocks

On the opposite side of the scale to small-cap stocks are blue-chip stocks. These stocks are large listed companies that have been around for a long time and have a long, stable financial track record. Some of Ireland’s biggest and most well-known companies are considered blue-chip stocks, including Bank of Ireland, Allied Irish Banks and Abbey.

In most cases, small cap stocks pay no dividends but blue chips stocks almost always do.

Should you invest in small cap shares?

You could consider investing in small cap stocks if:

  • You have a high tolerance to risk
  • You’re an experienced investor
  • You’re willing to cut your losses if the share price falls significantly
  • You have a long investment time frame and are willing to ride out the volatility
  • You’re happy to take a bit of a “gamble”

Tips for investors considering buying small cap shares

If you’re keen to invest in Irish small-cap stocks, here are some tips to help you get started:

Do your research

This is important for all investments, but particularly higher-risk investments like small cap stocks. Blue-chip stocks are, by their nature, lower-risk options as they’ve got a long history of strong financial performance.

Plan a strategy and stick to it

Before you start investing, decide which penny stocks you’re going to invest in and how much you’re going to invest in each one. It’s also important to decide what price you’d sell at if the shares were to fall and stick to it to avoid the “I’ll just hold a little longer and see if the price jumps back up” mentality. The same applies to gains.

Don’t make emotional decisions

It can be easy to get emotionally attached to a small-cap stock, as they’re often the underdogs in your portfolio. So when their share price falls and falls some more, you can find yourself making excuses as to why you should keep holding. This is why it’s important to make a strategy, so you leave the emotions out of it.

Don’t get sucked in by the “cheap” prices

Small-cap stocks may appear to be cheap in comparison to other shares listed on the Euronext Dublin, but don’t base your investment decision purely on this. One factor that influences a company’s share price is the demand for its stocks. The less demand from investors, the lower the share price. So some small-cap stocks may appear to be cheap, but you need to ask yourself why this is.

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