Sunday, February 1, 2009

Finding Market Bargains in Shrinking Companies

from The New York Times:

>>Lori Calvasina, a strategist at Citigroup, points out in a research report that middle-capitalization stocks are trading at their lowest valuations relative to small caps in more than 20 years. That makes many of the “fallen midcap stars” attractive, in her view, and she expects managers of funds that focus on smaller companies to agree and to begin buying them.She offered a list of 30 “new small caps” — companies with market values that have dipped below $2.5 billion after being above $3 billion last spring — that have buy ratings from Citigroup analysts. Six of these are also rated buys by at least 75 percent of the analysts who follow them: Forest Oil Corporation, a gas exploration company; C.M.S. Energy, an electric and gas utility, and four information technology companies, Nuance Communications, Arrow Electronics, Ingram Micro and Equinix.

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