Investors Should Look to Undervalued Europe for Opportunities, Fund Manager Says
Investors should consider the undervalued region of Europe for opportunities, according to fund manager Sean Peche. Europe has fallen out of favor, but Peche believes there are “very attractively priced” companies in the region that are being ignored.
Peche, who manages Ranmore Fund Management, points to companies such as French bank BNP Paribas, which has consistently grown book value, and Dutch investment bank ABN Amro, which has a 10.2% dividend yield. He also likes Associated British Foods, which owns retail giant Primark, due to its strong management team and attractive price.
In the UK, Peche sees opportunities in mid-cap firms such as Associated British Foods, which is trading at a discount due to its mid-cap size and UK listing. He also likes Mattel, the US toy giant, which has diversified beyond its core products and has a manageable debt level.
Mattel’s management team has launched a $1 billion buyback and the company has growth potential, according to Peche. The toymaker’s success is attributed to the popularity of its brands, including Barbie and Hot Wheels, and its ability to produce toys for hit films such as “Moana” and “Wicked”.
Peche believes that investors should look beyond the short-term volatility and focus on the long-term potential of these companies. He argues that running off to the latest, shiniest thing is not normally a good way to make money and that investors should take a more measured approach to investing.