Taking the lead as the best performers among the listed small and medium-sized enterprises (SMEs) in the last month are De’ Longhi with a remarkable 33% increase, followed by Servizi Italia at +29%, and Wiit at +21%.
Randone, Head of Mid Small Cap Research at Intermonte, suggests, “In this scenario, we recommend increasing exposure to mid-cap stocks, focusing on those offering good cash generation.”
While the Italian stock market gained 3.3% in the last month, mid-cap stocks experienced a significant rebound driven by speculations about a potential halt to interest rate hikes. In contrast, small-cap stocks remained lackluster. As of November 16, 2023, the Ftse Italy Mid-Cap index outperformed the main index by 3.2%, while the Ftse Italy Small Caps index recorded a 1% underperformance. Small caps on Piazza Affari have lost 7 percentage points since the beginning of the year. Intermonte’s latest monthly report on mid and small-caps identifies the best and worst performers.
De’ Longhi leads the podium as the best performer in the last month among listed SMEs, with a remarkable 33% increase, followed by Servizi Italia at +29% and Wiit at +21%. Other companies outperforming the Ftse Mib include Aquafil (+20%), Reply (+18%), Safilo (+14%), Fincantieri (+13%), Brunello Cucinelli (+13%), El.En. (+12%), Fila (+11%), Intercos (+11%), Civitanavi Systems (+10%), Webuild (+10%), Salcef Group (+10%), Iren (+10%), Cementir (+10%), The Italian Sea Group (+8%), Tinexta (+8%), Sesa (+8%), and Ieg (+8%). On the flip side, companies with medium and small capitalization reporting the worst performances include Dovalue (portfolio and real estate management related to deteriorated credits) at -18%, Talea Group (specialized in online distribution of parafarmaceutical and orthopedic products) at -12%, and Piaggio (two-wheeler vehicle manufacturer) at -9%.
Looking at performances since the beginning of the year, Buzzi-Unicem (focused on cement, concrete, and natural aggregates production) takes the lead with a +49% performance, followed by Maire Tecnimont (engaged in engineering, technology, and energy) at +43%, and Saes Getters (producer of advanced functional materials) at +40%. On the other end of the spectrum, Antares Vision (a technology company providing visual inspection systems and traceability solutions) faces a -67% performance, with Aquafil (producer of recycled and sustainable nylon threads) and Dovalue both at -56%.
“In the last month, Italian mid-cap stocks have experienced a significant rebound, once again driven by speculations that there should be no more interest rate hikes,” explains Andrea Randone, Head of Mid Small Cap Research at Intermonte. “The complexity of the political landscape is so high that it can be imagined as a deterrent to overly restrictive monetary policy. In Italy, the Budget Law seems to have limited room for maneuver, making the relevant discussions less relevant in the stock market.” Meanwhile, he adds, the results of the third quarter have offered overall “fairly comforting insights,” highlighting the attractiveness of the fundamentals of several companies, even in the presence of “some disappointment among industrial and consumer companies” suffering from the ongoing economic slowdown. “In this scenario, we recommend increasing exposure to mid-cap stocks, focusing on those offering good cash generation (consistently with the higher for longer interest rate scenario). Despite the rebound, technology stocks continue to be interesting, along with some utilities and companies with a significant order backlog,” concludes Randone.
