Small cap v/s Penny stock!

Small-cap stocks could be companies with quality and profitable businesses and may have already portrayed long-term sustainability. Whereas Penny stocks could very well be from companies with no real sustainable business. Often, they run up due to speculation in these counters or with demand driven by market operators. Penny stocks in comparison to small-cap stocks are quick to hit price circuits on both the upside and the downside. Quality small-caps have potential to become large-caps in the long run. Penny stocks as mentioned before are lower in market price as well as quality. It is best to avoid penny stocks whereas if you hold high-quality small caps for the long-term it can give you multi-bagger returns.