The sovereign-debt crisis in Europe is resulting in huge opportunities for value investors, speakers told attendees at Morningstar's 22nd annual Investment Conference in Chicago last week
“In the European markets, many of the non-financial companies have been painted with the same negative-valuation brush,” said Philippe Brugere-Trelat, executive vice president of Franklin Mutual Series, part of Franklin Templeton Investments, said as part of a panel on global investing. “There are a great number of European companies that are not too exposed to Europe.”
For example, many exporters throughout Europe have significant earnings and sales from other parts of the world, he said.
Daniel O'Keefe, managing director at Artisan Partners, said he is also looking for values in Europe. “There are a lot of interesting opportunities in Europe,” he said.
During a separate panel discussion last week on dividend investing, portfolio managers discussed opportunities in the property and casualty, technology and energy sectors.
Property-casualty providers such as Travelers, which just raised its dividend, is a particularly attractive investment, said Hersh Cohen, senior portfolio manager and chief investment officer at ClearBridge Advisors, a subsidiary of Legg Mason, during the panel discussion.
Chubb and Ace are also worth considering, said Don Kilbride, an equity portfolio manager with Wellington Management. “I agree that property and casualty has the most prospects for dividend growth among the financials,” Mr. Kilbride said
Despite the BP oil spill and pending regulation, Mr. Kilbride believes oil companies such as Exxon Mobil, ConocoPhillips and Chevron will all continue to be able to pay dividends. “I still think (the oil sector is) a reasonable place to be,” he said.
Messrs. Kilbride and Cohen both cited technology companies as an emerging area where they see opportunities for dividend payouts.
“We bought Intel Corp. for the first time in 15 years,” Mr. Cohen said. “It's a cash machine, and we think it has enormous potential growth in its dividend, as does Microsoft Corp.”
Jessica Toonkel Marquez is a reporter at InvestmentNews, a sister publication of Pensions & Investments
