As 99 percent of the S&P 500 moves lower, investors may want to turn to small cap stocks, Robert Sullivan of Satuit Capital Management told CNBC on Friday. He and Jack Ablin of Harris Private Bank offered positive and negative views on small caps.
“Investors are not going to be creating wealth by investing in large cap stocks,” Sullivan said. “When we look at year-to-date 1-year returns, 3-year returns, 5-year returns and 10-year returns, what we see is something very distinct: small cap has outperformed large cap. We don’t think that’s going to change.”
The Satuit Capital Micro Cap has returned nearly 14 percent annualized year-over-year to investors since 2000, said Sullivan.
And as large-cap financials continue to get battered by fears of European contagion, smaller companies could be a safer bet, since they have less international exposure.
Sullivan likes American Science and Engineering, Morton's and Anadigics .
Offering a contrarian view, Ablin pointed out that only 15 percent of U.S. exports go to the Eurozone.
“Our exposure to Europe is pretty minimized, even on the financial front,” he said.
"60 percent of our exports go to the emerging world. One of the things we’re talking about is, rather than to own emerging markets where the economies there seem poised to grow substantially, is to take those equities and actually buy large cap and export into those markets.”
What They Said Last Time:
- Sullivan's Latest CNBC Appearance (Nov. 18, 2009)
CNBC Data Pages:
Disclosure information was not available for Sullivan, Ablin or their companies.