Experts advise investors to remain cautious of the companies which have rallied more than 100% in the September quarter, as the momentum may not sustain for long.
Liquidity indeed is a cause of volume in this segment however it seems that investors feel this segment to be relatively undervalued and are expecting good returns with the recovering and rising Nifty.
We believe Nifty (LTP 11,220) would look attractive once the recent wave of correction takes it closer to its average valuation of 16.5 times of FY22 which would be in the range of 10,000 to 10,300.
We have seen broader participation across the large, mid, and small-cap space. In fact, the mid-cap & small-cap indices have outperformed the NIFTY in the past 6 months.
We do not expect a V shape recovery beyond 11300, rather retesting of the last week’s panic low around 10800 cannot be ruled out.
The sharp rally in most of the mid & small caps has narrowed down the valuation gap between the large caps which could lead to quality getting extra premium at least in the short term.
As many as 96 stocks in the S&P BSE Smallcap index which rallied 10-40 percent in the last five trading sessions
Brokerage houses have come out with their preferred picks in the small & midcap space that makes the job of investors easy but investors should do their homework as well.
Experts say the impact of new SEBI guidelines on large-cap will be minimal, but the buying impact on small-cap stocks will be quite significant.
Shah is of the view that the broader market has undergone healthy consolidation, thus any cool off from hereon should not be construed as negative, instead, it should be capitalized to accumulate quality midcaps.
Bhat is of the view that in the last 2-3 months small & mid-caps have outperformed but from a 10-year perspective, the performance of Nifty Midcap is almost in line with Nifty.
Valuations of small & midcap stocks are looking attractive relative to GDP and money supply, setting the stage for outperformance versus largecap stocks in the coming months, said Morgan Stanley
In terms of valuations, SMID stocks are looking more attractive, setting them up for a re-rating if the growth outlook improves as we think it will, highlights Morgan Stanley.
Kacholia pared stake in two companies which fell more than 30 percent each year-to-date
As of July 24, as many as 25 companies in the Big Bull's portfolio have released their shareholding data for the quarter ended June 30, 2020
Investors will have to be careful to check whether the pandemic has caused any structural damage to the stories of the companies in these sectors, and if yes, stay away from them.
Retail turnover has increased to about 57 percent of the average cash volumes on the exchanges in the first quarter FY21 while daily deliveries have seen a dip.
Out of 160 stocks that hit a fresh 52-week high in July, as many as 32 of them have already rallied more than 100 percent so far in the year 2020.
Much of the rally seen in the small & microcap space could be attributed to attractive valuations and new investors joining the D-Street party, suggest experts.
Nifty rallied 7.5% percent in June. Meanwhile, 62 Portfolio Management Schemes (PMSes) outperformed the index in the same period
The BSE Smallcap index has rallied about 44 percent and the BSE Midcap index 35 percent since March 24. The Sensex has risen 37 percent and the Nifty 38 percent during the period.
Pharma, consumer, cement and cement products are likely to be the leaders, banks can be performers but retail and malls will continue to struggle.
Broader markets continued to outperform as Nifty midcap and small-cap rose 1.4% and 3.5%, respectively. Sectorally, metal, financials and IT outshone during the week while infra and energy took a breather.
There is hardly any valuation gap between the Nifty50 and Nifty Midcap 100 Index, hence investors should be careful with mid and smallcap stocks, say experts.
Despite elevated global volatility, Nifty midcap and small-cap indices relatively outperformed during June 2020, as both indices rallied 11 percent and 15 percent, respectively.