🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

U.S. Small Caps valuation more appealing than broad S&P 500, says Berenberg

Published 06/12/2023, 05:59 PM
© Reuters US Small Caps valuation more appealing than broad S&P500, says Berenberg
US500
-
SP600
-

According to Berenberg Bank, U.S. small caps have struggled in recent months, underperforming the S&P 500. However, their valuations have become extremely attractive compared to their larger counterparts.

According to the firm, U.S. small caps appear to be pricing in a greater degree of macro risk relative to their large-cap peers. The median forward P/E for the S&P 600 SmallCap index is 11.8x, while the S&P 500 stands at 17.0x, representing a significant discount.

Similar valuation disparities in the past, seen only twice since 1990 (TMT bubble and COVID-19), have resulted in substantial outperformance by small caps.

According to the firm, investors may find compelling opportunities in U.S. small caps, while the case for European small caps is less convincing based on relative valuations.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.