Earnings Revision Trends Are Quietly Shifting The Small-Cap Narrative

Infrastructure Capital Advisors 503 Follower s Follow 5 Share Save Play ( 9min ) Comments Summary Consensus forecasts now imply substantially faster earnings growth for small-cap companies than for their large-cap peers, marking a notable reversal from recent history. Recent reporting seasons have delivered more upside surprises, and management commentary has been less cautious than in prior years. Analysts appear to be responding by adjusting estimates upward rather than retreating. Despite improving earnings sentiment, small-cap valuations remain deeply discounted relative to large caps. syahrir maulana/iStock via Getty Images Small-cap stocks have spent most of the past decade living in the shadow of mega-cap leadership. That long stretch of underperformance has conditioned investors to expect disappointment. Recently, however, a change in earnings expectations suggests the outlook for This article was written by Infrastructure Capital Advisors 503 Follower s Follow Infrastructure Capital Advisors ("Infrastructure Capital") is a leading provider of investment management solutions designed to meet the needs of income-focused investors. Jay Hatfield is CEO and CIO of the investment team. Mr. Hatfield is the lead portfolio manager of the InfraCap Small Cap Income ETF (NYSE: SCAP), InfraCap Equity Income Fund ETF (NYSE: ICAP), InfraCap MLP ETF (NYSE: AMZA), Virtus InfraCap U.S. Preferred Stock ETF (NYSE: PFFA), InfraCap REIT Preferred ETF (NYSE: PFFR), and a series of private accounts. Infrastructure Capital frequently appears on or is quoted in Fox Business, CNBC, Barron's, The Wall Street Journal, Yahoo Finance, TD Ameritrade Network, and Bloomberg Radio/TV. The team at Infrastructure Capital publishes a monthly market and economic report, quarterly commentaries, investing primers, and asset class and strategy research. In addition, Infrastructure Capital hosts a monthly webinar and attends industry conferences in an effort to provide educational investing resources.

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