Barclays has recently turned positive on US small caps amid the market turmoil, as valuations have returned to more attractive levels, and small caps have held up better than their larger peers in the sharp movements of the past few days.
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And Barclays expects this performance to continue going forward as there are multiple factors working in favor of the group. For example, the small-cap sector trades at a lower valuation than larger peers, while many small caps have better fundamentals than larger cap stocks, and a greater gearing to an improving domestic US economy.
Small caps: Undervalued
For value investors, the most attractive quality about the small-cap market at present is its valuation. The sector now trades at an average EV/EBITDA premium (ex-financials)...
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