The asset management company founded by the Stellenbosch-based Mouton family says investors will be better off investing in select mid-sized SA companies than in overpriced large cap stocks. Giving his 2019 outlook for the equity market, Greg Hopkins, chief investment officer of PSG Asset Management, said some mid-sized industrial companies, in particular, are trading at a big discount to their earnings, presenting an opportunity for canny investors. While many large blue-chip companies are trading at about 16 times their earnings, the asset manager said domestic stocks in its portfolio have an average price-to-earnings ratio of 8 to 9 times. “Where we are finding opportunities, it’s in industrials and in financials. These type of companies are often less crowded. Foreigners and most portfolio investors, when looking for exposure in SA, go mainly for retailers and some of the large banks. As a result, the liquidity premium for investing in large caps has not been this high in years,...

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