Perhaps the best thing about stock investing is, with the millions of publicly traded companies out there, you can find stocks to suit just about any investment style. Whether you are want to beat the market, grow your wealth slowly over time while minimizing losses or seek guaranteed, regular income from your investment, you can find a stock, or an array of stocks, that help you achieve your goals.

One attribute used to differentiate between stocks is the market capitalization of the company. Market capitalization is just a fancy term for the company's total market value, which is calculated by multiplying its share price by its number of outstanding shares. For example, a company with a share price of $50 and 20 million outstanding shares has a market capitalization of $1 billion.

Stocks are divided into echelons based on the company's market capitalization. A large-cap stock represents a company with over $10 billion in market capitalization, while a mid-cap stock represents a company with a market capitalization between $2 billion and $10 billion. Small-cap stocks are issued by companies with under $2 billion in market capitalization, and micro-cap stocks represent companies with under $300 million in market capitalization.

As a general rule, the larger the cap, the more conservative the investment, and the smaller the cap, the more aggressive the investment. Large-cap stocks tend to grow more slowly and hold their values better during down markets, and the big companies that issue them are much more likely to pay dividends. For income investors who are most concerned with receiving regular payments in guaranteed amounts, large-cap stocks are ideal. Small-cap stocks, by contrast, have the potential to grow more aggressively, but they pose more risk when the market turns bad. Small companies rarely pay dividends; instead, they take this money and invest it back into their businesses to fuel growth.

Micro-cap stocks represent the biggest duo of reward and risk. These small companies often have immense growth potential, especially if you pick companies with innovative products or business ideas, but due to their small size, they face more difficulty emerging unscathed from recessions and bear markets. Diversifying among many different companies and industries mitigates the inherent risk of investing in micro-cap stocks. The following are five promising micro-cap telecommunications stocks to consider for 2016.

Clearfield

Clearfield, Inc. (NASDAQ: CLFD) is a newer company, founded in 2008 and headquartered in Brooklyn Park, Minnesota. The company provides connectivity products to wireless and cable providers and utility companies.

Clearfield's stock performed respectably in 2015, notching a small gain while the broader U.S. indexes struggled to break even. The company shows several areas of fundamental strength. Its net income and revenue rose by double-digit percentages in 2015. The company has good operating cash flow, strong operating profit margin and a decent return on equity (ROE). Perhaps the most striking thing about Clearfield's balance sheet is that the company is debt-free.

Clearfield is valued highly, with a price-to-earnings (P/E) ratio of 23.5. Its high valuation is likely a result of investors willingly paying a premium for a company with such a strong financial position and lack of debt.

Lumos Networks

Lumos Networks Corp. (NASDAQ: LMOS) serves the Mid-Atlantic region with fiber-based telecommunications services. This company is also is its nascent phase; it was founded in 2011. Lumos is headquartered Waynesboro, Virginia.

The company did not have its best year in 2015 as far as net income and stock performance. However, if you are going to invest in a less-than-five-year-old company and reap the potential upside, you must be prepared for a roller coaster ride during the early years.

Fundamental analysis indicates Lumos can still be a good buy moving forward. The company's revenue is growing. Its operating margin, at 17.9% as of January 2016, is expanding. It has good operational cash flow, and its ROE is solid.

Otelco

Otelco, Inc. (NASDAQ: OTEL) is headquartered in Oneonta, Alabama. Founded in 1998, the company owns several small, independent telephone companies located in the Southeast and up and down the Eastern Seaboard.

This is a micro-cap company with tremendous upside. Otelco's operating margin is nearly 25%, and the company's net income grew by over one-third in 2015. Its operational cash flow of over $18 million is strong for the company's size. Otelco also has a low P/E ratio, suggesting that coupled with the company's growth potential is the prospect of an excellent value buy.

ClearOne

ClearOne, Inc. (NASDAQ: CLRO) distributes digital signage solutions in the United States and abroad. The company was founded in 1983 and has its headquarters in Salt Lake City, Utah.

Over the past 52 weeks, ClearOne's share price increased by over 25%. The company is backed by strong financials, including year-over-year revenue growth in excess of 70%. Its operating margin is 17.6%. Best of all, the company has no debt. With a low P/E ratio of 12.9, this is a stock for both value investors and growth investors to consider.

MagicJack VocalTec

MagicJack VocalTec Ltd. (NASDAQ: CALL) provides voice-over-Internet-Protocol (VoIP), the ability to make and receive phone calls using only an Internet connection, throughout the U.S. This stock is worth considering for 2016 on account of the company's strong margins, excellent operating cash flow, positive stock performance in 2015 and zero debt.

With operating margins above 21% and cash flow above $20 million, magicJack can invest back into the company while remaining debt-free. The stock gained nearly 5% in 2015 compared to broader U.S. indexes that treaded water or turned in slight losses. MagicJack's status as a debt-free company should appeal to risk-averse investors who worry about solvency in an uncertain economy. Even if the big gains never come to fruition, a company unencumbered by debt is unlikely to torpedo in value. The biggest area of concern is the company's slightly declining net income. Some investors worry the luster of the product itself is being outshined by free apps, such as Skype, which serve a similar purpose to magicJack's service.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.