The benefits have been reflected in small-cap earnings growth, which has outpaced the growth of their larger peers. Russell 2000 companies revealed first-quarter growth at an estimated 33.8%, compared to S&P 500 company earnings growth of 26.2% from a year ago.

“Even though (energy stocks have) had a good run, estimates will be climbing because analysts are raising their oil forecasts. So even though the stocks go up, they can still look cheap because the earnings estimate is going to go up as fast as the stock,” Steve DeSanctis, equity strategist at Jefferies, told Reuters.

Meanwhile, with crude oil prices above $70 per barrel on strong global demand, falling Venezuelan production and looming U.S. sanctions on Iran, the small-cap energy space is expected to continue to outpace the broader small-cap category.

“Some of the smaller energy service providers got banged up so badly when oil went down,” J. Bryant Evans, portfolio manager at Cozad Asset Management, told Reuters. “But the ones who survived have a real opportunity to grow and take market share now that oil is at $70 a barrel.”

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