Strong Gains Can be Seen on Small, Midcap, and Oil&Gas Stocks

DMG & Partners Securities said it believes small and mid-cap oil and gas stocks could continue to outperform the big-caps as investors seek to rotate into smaller cap plays with attractive valuations.

DMG said it likes companies with strong growth profile, track record in delivering profits and management with substantial stake in the company.

The broker's top picks are Ezion Holdings Ltd, Nam Cheong Ltd and Technics Oil and Gas Ltd, which it said are trading at a discount of 25-50 percent to the 2013 fiscal year price-earnings valuations for big-caps.

DMG advised investors to avoid Chinese shipyards with heavy exposure to commercial shipbuilding due to excess capacity, pressure on margins for new orders and deteriorating earnings visibility.