Articles by Phil Segner, CFA Co-Portfolio Manager & Sr. Analyst

The second month of Q4 earnings came in with an Up/Down Ratio of 1.54, just above the historical “two month” average of 1.53.

As the market rallied in February, the S&P 500 Equal Weighted Index (+5.2%) handily outperformed the Cap Weighted S&P 500 Index (+4.3%).

Growth Outperforms Value In February.

Small Caps are selling at a 20% valuation premium relative to Large Caps (23% last month), using non-normalized trailing operating earnings.

Consumer Discretionary sector weightings sank among all three market tiers, as this segment led the market lower in January. Health Care and Utilities sector weightings increased, as both outperformed for the month.

The Equal Weighted Index has outperformed the Cap Weighted Index in seven of the last nine months.

Small Cap Growth Outperforms (On Relative Basis) In Down Month

Small Cap Premium Continues Upward To 23%. Large Caps Lead On The Downside In January

Up/Down Earnings: Q4 Results Just Below Historical Average. Median Q4 YOY Revenue Comparisons: Strength In Large Caps. Q4 Median Company Earnings Growth: Initial Results Are Impressive

For 2013, the Equal Weighted Index bested the Cap Weighted Index by 4%. The Equal Weighted Index has outperformed the Cap Weighted Index in four of the past five years.

Growth Stocks Best In All Three Cap Categories.

Small Cap Premium Continues Upward To 21%. The red-hot equity market of 2013 was especially good for Small Caps with a +38.8% total return.

Up/Down Earnings: Q3 Ends Below Average. Median Q3 YOY Revenue Comparisons: Small And Mid Caps Continue Leading. Q3 Median Company Earnings Growth: Mid Caps Continue Leading

Small Caps are selling at a 20% valuation premium relative to Large Caps, using non-normalized trailing operating earnings.

Small Caps are selling at a 16% valuation premium relative to Large Caps, using non-normalized trailing operating earnings. Using estimated operating earnings, Small Caps are selling at a higher valuation premium of 23% (25% last month).

The first month of Q3 earnings came in with an Up/Down reading of 1.73, just below the historical average of 1.81 but ahead of the first months’ readings for Q2 (1.59) and Q1 (1.38).