We are starting to see a reversal in performance among smaller names, but whether this is the beginning of something more substantial or a hiccup remains to be seen.
For the quarter to date, large-cap stocks as measured by the Russell 1000 Index are still performing, with the index up 4.1%. However, small-caps as measured by the Russell 2000 Index are down 3.11% and microcaps as measured by the Russell Microcap Index are down 4.73% during the same period.
Within the growth-versus-value framework, large growth (Russell 1000 Growth Index, up 6.56%) is ahead of large value (Russell 1000 Value Index, up 1.53%) by a substantial margin. Small growth (Russell 2000 Growth, down 3.32%) and small value (Russell 2000 Value, down 2.9%) are performing similarly quarter to date, but value (up 23.02%) is still trouncing growth (up 5.37%) year to date.
In microcap land, growth (Russell Microcap Growth, down 7.27%) is well behind value (Russell Microcap Value, down 2.8%) for the quarter. Value (up 31.86%) is way ahead of growth (up 11.81%) year to date as well.
We typically see smaller names take punishment first as markets reverse and investors sell lower-quality, riskier names before they sell their larger, more stable holdings. It is unclear whether this represents the beginning of a selloff, but that would not surprise me if it was.
Elsewhere, the ever-mysterious agriculture/water rights name JG Boswell (BWEL) , which owns 150,000 acres in California and water rights, hit a milestone of sorts on Wednesday, closing above $1,000 a share for the first time in seven years. Boswell has been selling off some assets over the past couple years, including its stake in Phytogen to Corteva Inc. (CTVA) , Australian land holdings, and reportedly some water.
BWEL shares are up 71% year to date, and currently yield 1.8%. BWEL hit an all-time high of $1,190 in July 2014 as investors contemplated the value of the company's water rights. It has been a fairly long and slow climb since then, with many opportunities along the way to pick up shares on the cheap. This one is not for the impatient. Volume is extremely low and information is only available via annual reports issued to shareholders only.
