The Citi Global Equity Strategy team of Robert Buckland, Mert C Genc, Beata M Manthey, Jonathan Stubbs and Ayush Tambi unravel the mystery of the chronic underperformance by the world’s largest 50 companies in their research work ‘Mega Traps’ on October 17, 2013.
Not Mega-Caps…Mega Value Traps
The authors point out that an index comprised of these 50 global behemoths…
- Would be up just 31 percent since 2003 while the rest of the market shot up 129 percent.
- Trade at a 20 percent PE discount.
- Are a global value trap. (“With hindsight, outperforming the global equity market has been easy – don’t own the mega-caps,” say the authors)
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