Newsletter guru Jim Oberweis says that, while small-cap growth stocks have experienced a big rebound in the past two years, they have plenty more room to run, Canada’s Globe and Mail reports.
“Small-cap growth stocks remain undervalued relative to small value stocks,” Oberweis told MoneyShow.com’s Howard Gold. “What you haven’t seen [yet] is a multiple expansion back to more normal levels or above-normal levels. We’re not even at average.”
Oberweis says the normal P/E ratio range for the small growth stocks he holds is 25 or 26; currently, the small-cap growth stocks in his portfolio have P/Es around 18. And, in previous cycles, small growth stocks have overshot that 25 to 26 P/E range, Gold reports.
Oberweis also offers a couple specific small-cap growth stocks he’s high on, including Higher One Holdings.