Most Beginning Investors Ignore Market Cap. That's a Costly Mistake.

Key Points Beginner investors often use the share price figure to determine a stock's size or relative "cheapness," but this is a major mistake. Instead, use market cap as your starting point to assess a stock's valuation and long-term potential. Utilize more sophisticated valuation metrics, like P/E and EV/EBITDA, when analyzing whether a stock is undervalued or overvalued. These 10 stocks could mint the next wave of millionaires › Many people starting out in investing may look at a stock's share price and assume that this number can tell them whether a stock is large or small and whether it is cheap or expensive. However, in actuality, that is far from the case.