Related: Small Caps Providing Big Gains for Leveraged ETFs
The recent selling has been particularly damaging for the small-cap segment as small company stock valuations are at their lowest level in over six years and below that of their larger counterparts at the S&P 500. Consequently, Lambert argued that the cheap valuations would attract cost-conscious investors whom believe smaller companies have been oversold.
Furthermore, the economy is still chugging along, albeit at a slower pace than before. Solid consumer confidence could also bolster the small-cap outlook, notably those that focus on the domestic economy, whereas big multinationals with a larger international footprint will have to suffer through a slowdown in Europe and Asia, along with the strengthening U.S. dollar that hurts foreign sales.
For more information on the small capitalization stock segment, visit our small-caps category.