Frank Curzio is a research analyst for Jim Cramer and writes the Stocks Under $10 service at TheStreet.com . For more information about Stocks Under $10 and a free trial,
Small-cap stocks generally carry a higher degree of risk than large-caps because they don't generate as much cash, are less capitalized and are usually more volatile. Stocks that trade under $10 tend to carry an even higher degree of risk: Few research analysts cover the names in this group, and many of the stocks are completely out of favor with the public. However, the rewards of under $10 stocks can be impressive. To separate the bad stocks from the good -- the Vonages ( VG) and Sirius Satellites ( SIRI) from the Vasco Datas ( VDSI) and Allscripts ( MDRX), two stocks that now trade above $20 but began their run in the single digits (and have been members of the Stocks Under $10 model porfolio) -- start by following these three rules.