Davids versus Goliaths: A Closer Look at Valuation Distortions—Economic Times (India)

A Disparity in Valuation Prices Between Companies Large and Small in Similar Industries Adds to Investment Challenges  

Jwalit Vyas at The Economic Times (India) illustrates how a wide disparity in valuation between companies large and small offers an additional challenge for business owners, investors, and financial consultants.  Here’s more: 

The uncertain global and domestic macroeconomic environment over the past few years has created significant distortions in stock market valuations. Valuations of some sectors such as consumer, pharma and IT have ballooned as investors have taken shelter in these companies due to visibility of near-term growth. On the other hand, valuations of certain sectors such as engineering, infrastructure, power and real estate have hit the nadir.

Some such instances have been captured in the charts below. It is necessary for investors to show enough agility to identify winners and let go of losers at the right time in the face of such wide swings in valuations.

Vyas illustrates the disparity with the graphic below.  Visit The Economic Times site for more. 

Valuations Vary Considerably Between Companies Large and Small, Even in the Same Industry