In March of 2009, we featured five small-company stocks from the consumer discretionary sector.  It’s useful to remember that BetterInvesting determines the size of a company by looking at its yearly sales. Small companies sell less than about $500 million in goods or services a year. BetterInvesting also suggests you aim to have about 25 percent of your portfolio in small companies.

Each time I write this article, I remind readers that studying small companies can be a difficult process, as many sources that we tend to use don’t provide as much coverage of this part of the stock universe. The ideas below are an attempt to give you a jump-start in finding candidates; no recommendation is intended. Study any stock of interest thoroughly so that you can make an informed decision about whether it belongs in your portfolio. The rewards that come from investing in smaller companies can be significant, but you need to be prepared for the increased risk inherent in them.
   
Values for revenues, pre-tax profit margins, dividend yields and average price-earnings ratios are from the end of the most recent fiscal year. Since I’m writing this article a month before publication, the most recent fiscal year for all the companies except WMS is 2007.




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