Europe’s turmoil leaves equity valuations attractive, says DJE Kapital

The on-going sovereign debt crisis has left European equity attractively valued, Jens Ehrhardt of Munich-based wealth and asset manager DJE Kapital has said.

Ehrhardt, CEO, said that although continental equity valuations are at levels comparable to those seen in the wake of the 2008 financial crisis, they are on a considerably sounder footing.

“As was the case in the wake of the 2008 financial crisis, there are many bargains to be had looking at current valuations of many stocks. The difference between then and now, however, is that many companies today are on a more solid footing as a result of past restructuring and deleveraging, giving rise to greater upside potential in the event of positive news.”

He believes the best buys are cyclicals poised to profit from global megatrends such as increasing consumption and demographic growth. Ehrhardt is bullish on food manufacturers such as Unilever and healthcare providers such as Fresenius, he is bearish on investments in the European periphery and in companies with excessive exposure to bonds from these countries, such as French commercial banks.

 

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