10 Small-Cap Stocks Poised to Rise, History Shows (Update1)
BOSTON (TheStreet) -- Small-cap stocks are in for a double-digit ride over the next six months, if previous bear-market recoveries hold true to form.
S&P Capital IQ's chief equity strategist, Sam Stovall, said in a research note Monday that benchmark small-cap indices, the Russell 2000 and S&P Small-Cap 600, have gained an average of 15%, 30% and 47% in the first three-, six- and 12-month periods following the eight recoveries after big corrections or mild bear markets since 1949.
"And this time around, the outperformance is again quite similar," he said. The S&P Small Cap 600 gained 25% in the first three months of this recovery and is up 35% since early October.
So if the Small Cap 600 "performs as it has in the past, it has another 12 percentage points to go in the coming six months," according to Stovall's research, which he presents with the caveat that past performance is no guarantee of future performance.
Given that backdrop, the index will have risen 47% in the 12 months to early October 2012 from its early October bottom last year.