From Ticker Sense
As small caps have outperformed large caps over the last several years, the valuations of large cap stocks relative to smaller ones have declined. One way to illustrate this is by dividing the S&P 500 into deciles by market cap and calculating the P/E ratio of each. As the chart below shows, of the ten deciles, the two with the lowest valuations (based on trailing P/E ratio) are the ones that are made up of the 100 largest stocks in the S&P 500.
