S&P: Mid-Cap Equities are Where It Is At

April 19, 2007 (PLANSPONSOR.com) - Standard & Poor's Equity Research Services contended in a new research report that investors would do well to focus on the mid-cap asset class in 2007.

An S&P news release said that, as of April 17, the S&P MidCap 400 Index is handily outperforming the large-cap S&P 500 Index year-to-date, rising 8.9% versus only a 3.8% advance for the blue chip index.

Standard & Poor’s Equity Research believes it will be difficult for many large-cap companies to continue to post double-digit EPS advances, because of the size of gains needed. On the other hand, Standard & Poor’s believes mid-caps –

defined as companies with market capitalizations ranging from $1 billion – $5 billion – are generally at an earlier point in their growth trajectories, leaving them with a potentially longer asset class profit cycle, according to the news release.

“In a slowing economic environment characterized by decelerating, single-digit EPS growth for the U.S. large-cap equity asset class, we believe investors are gravitating towards mid-caps’ ongoing profit momentum,” said Alec Young, Equity Strategist for Standard & Poor’s Equity Research, in the news release. “We expect 2007 EPS growth for the S&P MidCap 400 Index to rise 13% vs. a 7% gain for the S&P 500 Index.”

For more information, go to  http://www.equityresearch.standardandpoors.com/ .

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