Go in to smaller companies, an industry expert advised investors today.
Many "micro-cap" shares are currently being sold for eyecatchingly low prices, new analysis from asset managers Gartmore shows.
Gervais Williams, head of the firm's smaller companies unit, said today that many stocks traded outside the FTSE All Share Index are worthy of investors' attention. These can commonly be found on so-called alternative indices, such as the FTSE Fledgling or AIM.
"Micro-cap" refers to firms with very small market capitalisations, or caps. Examples of "mispriced" firms of this kind cited by Gartmore include Civica, Enodis, Titan Europe and Aero Inventory.
Mr Williams commented: "Economic uncertainty means that the market has been largely ignoring the potential of investments at this end of the market. We're finding companies that are not only undervalued but plainly mispriced. Some of these stocks could rise by a multiple of our invested capital over time."
Investors have been encouraged to look for out-of-the-way shares, due to recent falls on global stock exchanges caused by the credit crunch. Large, or "big cap" financial firms traded on the flagship FTSE 100 and 250 indices have been particularly badly hit by the financial crisis.
Buy to let lender Bradford & Bingley, for example, has lost 90 percent of the value in its shares following the onset of the crunch.
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