At Extreme Investor Network, we pride ourselves on keeping our members informed about the latest trends and opportunities in the market. Recently, BMO Capital Markets released a report indicating that small- and mid-capitalization stocks may be poised for a rebound after a period of underperformance.
According to BMO, the S&P MidCap 400 index and S&P SmallCap 600 index have shown signs of improvement, with gains of 8.2% and 0.2%, respectively since the start of the year. This is in contrast to the S&P 500 index, which has gained roughly 9.5%. Over the past year, the small and midcap benchmarks have seen increases of 15% and 24%, while the large-cap index has soared 31%.
March has been a particularly strong month for SMID-cap stocks, with the S&P MidCap 400 outperforming its large-cap counterpart. This has led BMO to believe that smaller stocks may be reaching a bottom and now present an “extremely attractive” relative valuation.
Brian Belski, a strategist at BMO, emphasized the potential buying opportunity for investors in the small and midcap space. He recommended a highly selective approach to portfolio positioning, with a focus on companies that have the potential to outperform in the current environment.
To capitalize on this trend, BMO listed several stocks in its SMID-cap universe that they rate as outperform. Some of the top picks include DoorDash, Dynatrace, CubeSmart, Snap, Ross Stores, and Constellation Energy.
DoorDash, with a market cap of $56 billion, has been highlighted for its strong performance in the on-demand food delivery market. Dynatrace, a software company with a market cap of $13.7 billion, is expected to benefit from long-term share gains and consolidation opportunities. CubeSmart, a real estate investment trust with a market cap of $10 billion, is seen as a solid pick for potential upside.
At Extreme Investor Network, we believe that staying informed about emerging trends and investment opportunities is crucial for success in the market. By taking a selective approach to portfolio positioning and considering the recommendations from experts like BMO Capital Markets, investors can position themselves to take advantage of potential gains in the small and midcap space.