Best US stock bargains are in big caps: Greenblatt

By Jennifer Coogan

NEW YORK (Reuters) - Some of the best U.S. stock market bargains are among the largest capitalization companies, said hedge fund manager Joel Greenblatt of Gotham Capital, speaking at the Reuters Hedge Fund and Private Equity Summit on Wednesday.

While small-cap stocks, or companies having a market capitalization between $100 million and $2 billion, have beat their larger counterparts since 1999 on an annual basis, their gains have made them less attractive based on valuation.

"I don't look at sectors, but the bargains we're finding are mostly very large caps," said Greenblatt, author of "The Little Book that Beats the Market" and other books.

Computer maker Dell Inc. (DELL.O: Quote, Profile, Research, Stock Buzz) and blue-chip software maker Microsoft Corp. (MSFT.O: Quote, Profile, Research, Stock Buzz) were two such bargains Greenblatt cited. Dell and Microsoft have market capitalizations of about $68 billion and $286 billion, respectively.

Credit-card issuer American Express Co. (AXP.N: Quote, Profile, Research, Stock Buzz), which Greenblatt said he owns, has a $65 billion market cap and is a component on the Dow Jones Industrial Average .DJI.

"I think that one has a long way to run. Why people don't realize what a great business that is falls under the category of 'I don't know and I don't care,'" Greenblatt said.