Value Line - Select Small Cap Stocks Index

The Value Line Select Small Cap Stocks Index

Description and Methodology


The Value Line Select Small Cap Stocks Index is an equal-dollar weighted index comprised of between 40 and 60 U.S. traded Small Cap Stocks ranked #1 by Value Line Publishing LLC ("VLP") in the Value Line Small Cap Stocks Ranking System.

For purposes of the index, Value Line currently defines Small Cap Stocks as 40% to 60% of the companies in Value Line Investment Survey with the lowest market capitalization that issue shares that are approved for listing and trading on a national securities exchange.

  • Methodology
  • Value Line Small Cap Stocks Ranking System is a purely quantitative computer model applying the approach of the famous Value Line Timeliness™ Ranking System to the universe of Small Cap Stocks. This Value Line Small Cap Stocks model is especially designed for Small Cap Stocks and therefore differs from the Value Line Timeliness™ Ranking System.

    The Value Line Small Cap Stocks Ranking System seeks to selects the "best-for-investment" stocks among all U.S. traded Small Cap Stocks. Since the total number of U.S. traded Small Cap Stocks varies year-over-year, the Value Line Select Small Cap Stocks Index historically includes between 40 and 60 Small Cap Stocks, 50 stocks on average.

    The Value Line Select Small Cap Stocks Index is rebalanced and reconstituted once per quarter.

  • Calculating the Value Line Select Small Cap Stocks Index
  • The index assumes equally weighted positions in each stock, as of each rebalance. Upon Value Line Select Small Cap Stocks Index's introduction in 2009, the index values were computed on a daily basis dating back to 1995 to provide a historical frame of reference.

    The Value Line Small Cap Stocks Ranking System measures relative probable price performance of all small cap stocks out of the approximately 600-1,000 small cap stocks in Value Line Investment Survey during the next six to 12 months.

    The Value Line Small Cap Stocks Ranking System uses advanced statistical tools analyzing up to 20 years of history to identify factors predicting future performance. The input data include stock historical prices, items from financial statements like net income or revenues, as well as industry classification of each stock and its market cap. All data are actual and known.

    A computer program combines these elements into a forecast of the price change of each stock, relative to all other Small Cap Stocks in Value Line Investment Survey for the six to 12 months ahead.

    This computer program applies various proprietary screens and factor weights to rank small cap stocks according to their future performance potential.

    Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions, or for the results of actions taken based on information contained herein. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. © Value Line Publishing LLC RIGHTS OF REPRODUCTION AND DISTRIBUTION ARE RESERVED TO THE PUBLISHER. The Publisher does not give investment advice or act as an investment adviser. Value Line, Inc., its subsidiaries, its parent corporation and its subsidiaries, and their officers, directors or employees as well as certain investment companies or investment advisory accounts for which Value Line, Inc. acts as investment advisor, may own stocks that are mentioned on this Value Line Web site.