European small-cap stocks are on a 27% discount to their larger-cap peers, a level that some analyst...
European small-cap stocks are on a 27% discount to their larger-cap peers, a level that some analysts see as historically cheap.
In the market rebounds seen in October, European small-cap stocks underperformed large-cap peers by around 6%, with information technology stocks providing the best performing small-cap sector.
SchroderSalomonSmithBarney analyst Manolis Liodakis said: 'Small caps underperformed large caps by 5.9% as the equity market rebounded in October. At the sector level, information technology and telecommunications were the best-performing small-cap groups, although both failed to match gains made by their large-cap counterparts.'
Liodakis noted energy and utilities represented the worst-performing small-cap sectors.
Earnings revisions remain negative in general for European small caps, though they are no worse than those experienced by large-cap stocks.
Relative to large caps, the small-cap sectors to experience the lowest levels of negative earnings revisions are financials, consumer staples and materials, he said. Those performing worst by comparison were small-cap utilities, technology and industrials.
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