Street Beat

Originally Published September 1999

MARKET ANALYSIS

Thomas J. Gunderson

Over the past two years, Wall Street has been conducting a very public love affair with large-cap stocks. The repercussions of such focused attention to market cap have been magnified among medical technology companies.

Consider the U.S. Bancorp Piper Jaffray medical technology indices (see Figure 1). Year-to-date, the large-cap stock index has increased 11.24%, while its small-cap counterpart has declined 0.4%. Performance over the trailing 12 months is even more one-sided: large-cap med-tech companies are up 24.2% versus the 5.5% decline of their small-cap counterparts. To put these numbers in perspective, the technology-heavy NASDAQ index increased 27.4% and 44.0% over the same respective periods.

Figure 1. The U.S. Bancorp Piper Jaffray medical technology indices for January through June 1999 illustrate Wall Street's current favor toward large-cap companies.