Macro: Small Companies
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Macro: Small Companies

Steven DeSanctis finishes in first place — he was No. 2 in 2006, the last time this sector was published — thanks in part to his “great summary pieces on what is driving the small- and midcap markets,” according to one ­money man­ager.

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Steven DeSanctis


Steven DeSanctis Merrill Lynch


SECOND TEAM


Lori Calvasina ­ Citi


Steven DeSanctis finishes in first place — he was No. 2 in 2006, the last time this sector was published — thanks in part to his “great summary pieces on what is driving the small- and midcap markets,” according to one ­money man­ager. “Performance recently has been driven by short covering and fund flows” ­into the ­iShares Russell 2000 index, an exchange-­traded fund that tracks the index,” says DeSanctis, 40. “What should be driving performance are valuations, credit spreads, volatility, economic conditions and earnings growth.” The Merrill Lynch analyst does not make specific stock recommendations but instead focuses on sector trends and for the past year has preferred small-cap growth over small-cap ­value. Small-cap growth stocks outpaced the broad market by 6.7 percentage points in the 12 months ­ended mid-­September. ­Citi’s Lori Calvasina debuts in second place. “I like the way she slices and dices the performance of the small-cap indexes, especially taking note of weightings and performance by sectors,” explains one fund man­ager. Calvasina does not recommend specific companies. Instead, she suggests appropriate sector weightings within the small-cap universe. In April she down­graded energy small-caps to underweight, after their performance in her economic ­model fell ­into negative territory, and simultaneously upgraded consumer-­discretionary small-caps because “it was pretty close to the end of the sector being beaten up.” Although she admits that the calls were early, companies in small-cap consumer-­discretionary rose 6 percent in the second half through mid-­September, and small-cap energy companies plunged 28 percent, Calvasina says. No analyst received sufficient votes to warrant publishing a third-place ­ranking.


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