SMID Indices PE Has Hit A Record High

SMID indices now trade at valuations near the high end of historical ranges, thanks to strong performance witnessed in 2013.

Scott T Chronert and Louis L Odette of Citi Research however point out a number of well-positioned SMID stocks, through their Value Creators SMID Focus List.

Growth vs. Valuation face-off

Citi analysts point out that for 2013, it appears that Russell 2000 ex-neg earnings growth will settle in the 6 to 8% range. However, relative to +33% index appreciation year-to-date, the implication is that small cap and broader SMID cap has experienced significant multiple expansion.

also see: Can the Russell 2000 keep up the pace? A Look At Earnings, PE

The analysts feel such an expansion has...