Big value in small caps: DMG

SELECTED small companies in the offshore and marine, Singapore construction and China environment sectors could be ripe for the picking, according to a small-cap report by DMG & Partners Research.

Valuations of companies with market values of under $2.5 billion have been depressed since the last quarter of 2013, when unusual price collapses in a handful of stocks led to a sell-off among small caps, DMG head of research Terence Wong told investors at a briefing.

Small caps under DMG's coverage are currently trading at fewer than 10 times earnings while growth expectations are about 20 to 25 per cent over the next year. By contrast, large caps are trading at about 14 times earnings with growth expected to be only about 14 times.