Market Insider
- Europe Has Wall Street's Bull on a Short Leash
- Hostage to Headlines
- Traders Worry Over 'Possible Risks' During Long Weekend
- Oil Declines, but Doesn't Help European Consumers
- Facebook Analyst Reports All Over the Map
- More Fallout From the Facebook Fiasco
- Stocks to Watch: CHK, PAY, FB, MS & More
- Facebook and Morgan Stanley's 99 Problems
- Markets Could End Week Quietly
- Stocks to Watch: CHK, PAY & More
EDITOR
RSS FEED
Stocks Outlook: Small Caps Still Have Way to Go Higher
Text Size 
CNBC Executive News Editor
In the small cap world, it's actually been the less liquid micro caps that have outperformed. She said those stocks were down 3.3 percent in January while the small cap universe was down 3.68 percent. The Russell 200 large caps were down 3.7 percent in January.
The valuations of small cap stocks versus large caps are a little pricier than normal, she said. At the end of January, "basically relative p/e small to large was 1.12 times and the long-term average since 1978 was 1.02 times."
"We're a little bit pricey but the maximum we've ever seen this at was 1.28 time and I think that's when you start to see the
Calvasina is currently recommending an overweight on tech but the group has issues, she said in a recent interview.
"There are the 3 sectors that look expensive and represent 28 percent of the market cap" of the Russell 2000 technology group. Those sectors are semiconductors, semiconductor equipment, and computer technology, which includes hardware and peripherals.
"42 percent of the sector looks really, really cheap," she said. Those stocks include software services, internet related companies, computer services and telecom equipment. Electronics and electronic equipment are also attractive.
Calvasina is overweight tech but has had the sector on downgrade watch for the last couple of months.
"People were moving into the financials this month, which totally baffled me. We have commercial real estate hanging over some of these banks. I look at forward p/e on the financial sector and it just doesn't' look cheap. The forward p/e (price to earnings ratio) is probably 0.8 times relative to the Russell 2000, and the long term average is 0.7 times."
Citigroup's analysts have buy ratings on the following small/mid cap tech names:
CSG Systems, Akamai Technologies, Opentable, Tech Data, Adtran, EchoStar, JDS Uniphase, Ciena and Brightpoint. They have sell ratings on Palm, ATMI, Entegris, Brooks Automation, Intersil and Amkor.
Other small cap names recommended by Citi analysts include Office Max, Thor, Convergys, Formfactor and Leap Wireless. They also like mid caps Phillips Van Heusen, Biomarin and Lincare.
More From CNBC.com
- Get After-the-Bell Dow 30 Quotes
- Credit Spreads and Libor Data
- Futures and Pre-Market Data
- Currency Data
Questions? Comments?
- Critical elections are scheduled for Greece in June. Here are some of the players and their roles.
- Our financial system is still not designed to meet the needs of poor families, says this author.
- Statistics show there aren’t many women billionaires compared to their male counterparts. Why?
- Click to see various forms of funding and what entrepreneurs have used to build successful companies.
- Here are some of the most expensive hotels in the world to book. And we mean expen$$ive.
- Always drink responsibly and when you do, try one of these more unusual and tasty drinks. Cheers!
Data is a real-time snapshot *Data is delayed at least 15 minutes
