Tuesday, January 5, 2016

75 per-cent blue chips below 5-year PEs 5 Jan, 2016


Should investors can pick large-cap stocks over mid-caps at this juncture? More than 75 per-cent of the blue chips across sectors were trading below their 5-year average price-to-earnings (PE) ratios.

In comparison, around 55% of the mid-cap stocks are trading greater than their 5-year average PEs; which means, large-caps are cheaply as compared to small-caps.

Large-caps have been at the receiving side in the previous few months on account of foreign institutional selling, resulting in contracted valuations.

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