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Make way for the megacap boom

Posted on June 14, 2007 by Richard Beddard
Filed Under Markets |

The dog-days of this bull market will be marked by a megacap boom, says Alphaville, quoting the Lex column. Here’s the logic:

  1. The worlds 120 largest companies are 15% cheaper than the next 1,000. It didn’t used to be that way.
  2. Big public companies have 40% less debt than their smaller peers.
  3. If profitability declines, they’re less risky.
  4. If it stays high they have the most capacity to borrow and invest at high returns.

Confirmation for value investors who, I hope, had already spotted this.

Category: Markets

Comments

2 Responses to “Make way for the megacap boom”

  1. So you think Glaxo's cheap? : Interactive Investor Blog on July 20th, 2007 12:41 pm

    [...] you think GlaxoSmithKline’s cheap? Along with many of the world’s largest companies, it’s trading on a low price earnings ratio in comparison to recent years, and smaller fish. [...]

  2. You. Investor. You're a sucker. : Interactive Investor Blog on July 25th, 2007 11:33 am

    [...] Not necessarily right now [...]

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