A common theme you’ve probably heard recently is that breadth has been strong during the rally off the market’s 2016 lows on 2/11. Small and mid-cap stocks have contributed just as much as large-cap names, which is a healthy sign. Even within the S&P 500 — which is an index of all large-cap stocks — smaller names in the index have led. You can see this trend in the chart below, which breaks the S&P 500 into deciles (10 groups of 50 stocks each) based on a stock’s market cap on 2/11. Decile 1 on the left contains the 50 largest stocks in the index — basically the mega-caps. Decile 10 on the right contains the 50 smallest stocks in the index. For each decile, we show how the average stock has performed since the 2/11 low. As you can see, the 50 stocks in the biggest decile are up an average of just 11.7% during the rally. The 50 smallest stocks in the S&P? They’re up an average of 42.5%! That’s some serious outperformance.
Other stock characteristics like dividend yield, valuations, analyst sentiment, and short interest have also impacted performance. Start a 14-day no obligation free trial to our paid research to see more of our decile analysis.