Where Is the Deep Value in Small and Micro Caps This Week?
Tuesday, October 13, 2026 · Johnny Hopkins
The Acquirer’s Multiple® Small and Micro Cap screen searches a less heavily followed part of the market, where limited analyst coverage and lower institutional ownership can sometimes allow significant valuation gaps to develop.
This week’s screen contains 198 companies, with a median Acquirer’s Multiple of approximately 9.1x. Of those, 77 trade below 8x and 39 trade below 5x.
Where the Cheapest Opportunities Are Concentrated
The sub-8x group spans several areas of the market, including:
- Banks, investment services, specialty finance and insurance
- Transportation and infrastructure services
- Energy exploration, downstream energy and oilfield services
- Apparel, automotive parts and consumer-related businesses
- Software, internet and data services
- Healthcare, medical devices and biopharmaceutical companies
- Food production and machinery manufacturing
- Telecommunications and technology services
Financial businesses remain particularly well represented, with banks, investment services, specialty finance and insurance accounting for 17 of the 77 companies trading below 8x.
Technology-related businesses also feature prominently, particularly across internet and data services and software.
The cheapest part of the screen remains spread across multiple industries rather than concentrated in a single sector.
Cheap—But Are They Producing Cash?
A low valuation becomes more interesting when it is supported by cash generation.
Among the 77 companies trading below 8x, the median free-cash-flow yield is approximately 14.3%, and 68 report a positive free-cash-flow yield.
The group’s median five-year return on assets is approximately 11.3%, while 63 companies report a positive shareholder yield.
These figures suggest that many of the statistically cheap companies are also generating cash and returning capital to shareholders.
In particular, the combination of a median free-cash-flow yield above 14% and positive shareholder yields across much of the group provides investors with candidates worth investigating beyond headline valuation multiples.
However, high free-cash-flow yields can sometimes reflect temporarily elevated earnings, cyclical conditions or market concerns about future profitability.
Why Small and Micro Caps Require Additional Research
Smaller companies can offer greater valuation discrepancies, but they can also have lower trading liquidity, more volatile earnings, concentrated customer bases and less comprehensive public information.
Financial companies require particular attention because traditional measures of debt, cash flow and enterprise value can behave differently from those of non-financial businesses.
The Acquirer’s Multiple is a starting point for research. Investors should examine debt, cash-flow consistency, capital allocation, competitive position and whether recent earnings are unusually high.
Bottom Line
Approximately 39% of this week’s 198 Small and Micro Cap companies trade below an 8x Acquirer’s Multiple, with 39 companies trading below 5x.
The sub-8x group also has a median free-cash-flow yield of approximately 14.3%, while 68 of the 77 companies report a positive free-cash-flow yield.
With a median five-year return on assets of 11.3% and 63 companies reporting positive shareholder yields, the cheaper end of the screen offers a substantial pool of statistically inexpensive businesses for further research.
The complete premium screen provides company names, rankings and the underlying valuation, cash-flow, shareholder-yield and quality measures.
🔎 ACCESS ALL 4 STOCK SCREENS
In addition to our free U.S. Large-Cap 1000 Screener, subscribers receive access to the complete All Investable, Small and Micro Cap, and Canada All TSX screens—including company rankings and valuation, free-cash-flow, shareholder-yield and quality measures.