Large Caps 'So Cheap, They're Ridiculous': Manager

Despite a small bounce in shares this week, larger companies are still "cheap as chips" Peter Toogood, Director of Investment Services at Old Broad Street Research, told CNBC Tuesday.

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"The big companies are so cheap now," he said, adding: "I'm buying them."

"Dividends are strong and valuations are at a generational low for those stocks."

He cited pharmaceuticals company GlaxoSmithKline and consumer goods giant Unilever as examples of high-yielding stocks which will be relatively unaffected by the recession.

"If we have a double dip recession, you will see 15-20 percent earnings falls," Toogood said.

"There has been good value in a lot of these large-caps that has been ignored for a long time."

After the market falls of the summer, investors are now looking for undervalued stocks.

Gold, which scaled yet another record high on Tuesday morning, is "a useless long term wealth store," Toogood believes.

"Negative real interest rates, that's why gold is going up. Anything above $1,200 is just someone's view."

Citi analysts hiked their predictions for gold prices on Monday. The bank now believes that the price of gold will average $1,650 per ounce for 2012 and $1,500 per ounce for 2013

There is increased talk that gold could be the latest bubble to inflate in the markets. The precious metal is traditionally seen as a safe haven investment, and has been boosted by speculation about a double dip recession in the US and continued worries about the euro zone debt crisis.

Markets will need the catalyst of a resolution of both the euro region's and the US's problems before the current volatility calms down, according to Toogood.