The Financial Post reports in its Friday edition that much stronger earnings than their larger counterparts has driven the recent outperformance of small cap gold stocks. The Post's Jonathan Ratner, writing in Trading Desk, says that as the price of bullion has remained flat over the past year, many gold producers continue to trade near their 52-week lows. However, Martin Roberge, portfolio strategist at Canaccord Genuity, believes we are seeing the start of another cycle of outperformance for small cap gold stocks. "The price ratio between our small and large cap gold indexes is clearly turning around," Mr. Roberge said in a report. "As we expected, the outperformance of small cap gold equities is driven by a superior earnings performance, thanks to more benign cost inflation and fewer production misses." The strategist found that since the market's bottom in March, 2009, there have been three cycles of small cap gold outperformance. They saw absolute price gains of 77 per cent, 65 per cent and 33 per cent, respectively, from trough to peak. Canaccord's favourite small cap gold stocks are Mexico-focused Argonaut Gold and Mag Silver, Brazil-focused Belo Sun Mining, and Latin America-focused Silvercrest Mines.