Results look even weaker than those indicated by the first two months of the quarter’s readings. The Q1 ratio of 1.15 is well below the historical average of 1.53, and the lowest reading since Q3 2009.
Growth stocks are still undervalued compared to their own history. Royal Blue Growth is less undervalued than the other Growth segments, and it is closing in on its historical average valuation. Value stocks are all overvalued (but less so in the Small Cap subset).
Small Caps are selling at a 14% valuation premium relative to Large Caps, using non-normalized trailing operating earnings (8% last month). Using estimated 2013 operating earnings, Small Caps are selling at a higher valuation premium of 22% (16% last month).