European Mid-Caps: Playing Earnings, Valuations Catch-Up

If Barclays Bank is correct, a relative value trader’s dream could be setting up between European and US mid-cap stocks.

European mid-caps under-performed similar US stocks

In a research note today, the bank noted that performance of European mid-caps (minus UK stocks) has significantly under-performed similar US stocks. In fact the gap in value between the two is the largest since January of 1995.

The reason for this divergence of value is due to earnings of European companies.  "The reason for the under-performance of mid-caps in Europe appears to be clear,” the report...