Investors should look for opportunities in the unloved region of Europe, according to fund manager Sean Peche, who said there were some companies in the region with “very attractive prices.”
Europe has fallen out of favor, Ranmore Fund Management’s Peche told CNBC’s Silvia Amaro – and investors have been distracted by Donald Trump’s US Election victory.
“At the same time that Europe was struggling, there was this Trump euphoria,” Peche said. “So everyone rushed to invest in the US… But relying on the newest, shiniest thing is usually not a good way to make money.”
Peche shrugged off investor concerns about France, which – together with Germany – has been affected by political unrest in recent weeks. French President Emmanuel Macron named Francois Bayrou as his new prime minister last week after Overthrow of Michel Barnier’s government.
Macron called early elections in June, which resulted in a result without a clear majority and triggered months of political chaos and gridlock.
But Peche remains unimpressed. “Maybe the euro will fall apart, but probably not. And the companies we own are very attractively priced,” he added.
These stocks include the French bank BNP Paribas – whose book value (or net worth) he believes has been steadily increasing – and the Dutch investment bank ABN Amrowhich has a dividend yield of 10.2%. “It’s very attractive,” Peche said.
Looking at the UK, the fund manager said “attractive” stocks such as Associated British Foodswhich owns retail giant Primark, were also ignored by investors.
“Primark is doing really well. It’s a beautiful, diversified company with a great management team. “I’m not going to wake up tomorrow and find that the management team did something stupid,” he said.
“They have an attractive price. We get a nice dividend. They are buying back shares but it is out of favor because it is a mid-cap company and is listed in the UK.”
Eyes on the toy manufacturer
Peche is optimistic about mid-sized companies across the Atlantic, such as the US toy giant Mattel.
With well-known brands like Barbie and Hot Wheels under its umbrella, the toy maker has diversified beyond its core products.
Mattel’s management team has “turned the business around so that the debt is now very manageable, and they’ve started.” a $1 billion buybackPeche said.
The release of a new animated Barbie Netflix series in November and a second documentary series in September chronicling Mattel’s rise gives the toymaker – currently worth about $6.2 billion – “growth potential,” said Bad luck.
Mattel saw a sharp increase in Barbie toy purchases after the explosion Success of the “Barbie” film in 2023 the highest grossing result Film of the year, grossing more than $1.4 billion worldwide. However, toys were also made for hit films such as “Moana” and “Wicked”. The latter had a catch and it had to withdraw its line of character dolls after a packaging error linked it to a pornographic website.
In October both Mattel and competitors Hasbro lowered their year-end forecast as toy sales fell in the third quarter. Mattel expects sales in the final three months of the year to be “comparable to slightly down” compared to the previous forecast update.
—CNBC’s Kristian Burt contributed to this report.
