Maltbie's Minute on the Market: Selective Decoupling Ahead

Robert Maltbie |

For Singular Research's 2012 outlook, we see the broader market in a seemingly eternal tug – of war between countervailing forces, the fear of Euro contagion and decelerating EPS growth, starting with Q4 negative Q/Q EPS comparisons with a backend of the year pickup vs. attractive valuations & corporate buy backs & mergers and acquisitions. Tomorrow, we'll be highlighting some of the top names we like for 2012.

With EPS yields on the market sparking further equity retirement as strategic m & A will re-accelerate as the US economy decouples from Europe. We believe an improving employment picture will increase confidence, lifting money velocity from 30 year lows providing an upside surprise in 2012 GDP, possibly to a 3% growth level.

In the small cap realm, at present, the market appears fairly valued, as our longtime market proxy- New Horizons funds trades at 1.5x S&P 500 levels. Thus, selectivity will be rewarded and will favor growth over value in a slow growth environment with an eye on strategic takeover candidates. We are still finding growth at a discount as our median stock under coverage trades 11x our 2012 EPS estimate with a 7.6 EV/EBITDA and 22% expected EPS growth.

Disclosures: To read Singular Research’s important disclosures, click here.

Singular Research

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
RDS.A Royal Dutch Shell PLC American Depositary Shares ( 47.74 -0.24 -0.49 2,758,661

Comments

Emerging Growth

Relevium Technologies Inc.

Relevium Technologies Inc is engaged in the acquisition of products, technologies and businesses relating to musculoskeletal function, specifically Pain Relief, Injury Recovery and Active Performance.

Private Markets

D-Wave

D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…

Almond Smart Home Router by Securifi

Securifi sells user friendly touch screen routers that also have support for IoT/home automation.Securifi’s Almond revolutionized wireless router setup with its easy to use Touchscreen Interface in 2012. Now our…