Robert Sullivan Says Investor Focus May Turn To Small Caps

In an article on the CNBC, Robert Sullivan of Satuit Capital Management pointed out that investors might want to shift their focus to small cap stocks, with the majority of the stocks in the S&P 500 heading southwards.

Sullivan mentioned, “Investors are not going to be creating wealth by investing in large cap stocks… we look at year-to-date 1-year returns, 3-year returns, 5-year returns and 10-year returns, what we see is something very distinct: small cap has outperformed large cap. We don’t think that’s going to change.” He pointed out that Satuit Capital Micro Cap has already delivered close to 14% annualized returns year-over-year to investors since 2000.

As smaller companies having less international exposure, they seem to be safer bet than the large-cap financials that continue to suffer due to European contagion. Sullivan stated his preference for stocks such as American Science and Engineering (NASDAQ: ASEI), Anadigics (NASDAQ: ANAD) and Morton’s (NYSE: MRT).

However, Jack Ablin of Harris Private Bank said that only 15% of US exports are channeled to the Eurozone, resulting in the US facing limited exposure to Europe. "60 percent of our exports go to the emerging world. One of the things we’re talking about is, rather than to own emerging markets where the economies there seem poised to grow substantially, is to take those equities and actually buy large cap and export into those markets,” he added.

Read more on CNBC.