Cheapest in 20 years
Nov 16, 2022
European stocks remain unloved, especially the ones outside of the mainstream names that are widely owned like LVMH, ASML, Roche, Unilever or Nestlé. There are multiple reasons for this lack of love: from the energy crisis, over inflation, war in Ukraine, currency risks, lack of innovation compared to the US, lack of political leadership, structural inefficiencies in the labour markets, high taxes, … The result is that many good companies are being offered at bargain prices: MSCI Europe Value for example currently trades at 7.2 times forward earnings, its lowest level in almost 20 years. The European value space becomes an increasingly interesting hunting ground with a wealth of opportunities for long term investors who are focussing on companies with undervalued earning power. These are exactly the type of businesses we invest in at ECP in our European value strategy.