Large-cap prosperity beckons

CONFERENCE

With small and mid caps overvalued and a bubble forming, it may be time to look to larger firms

Pan-European investors should sell out of small- and mid-cap holdings trading at above 20 times earnings to buy large caps on less than 15 times, Cazenove's Europe head Chris Rice has claimed. Speaking at the 2006 Senate Conference in Monte Carlo, Rice pointed to a bubble in small and mid caps forming in recent years, with the lower end of the capitalisation scale currently sitting on a 27% valuation premium to larger companies. Coming after an unprecedented period of large-cap growth in the 1990s, this small- and mid-cap bubble has led to a situation where simply investing in the asset ...