Invest in Europe with these shares at attractive prices: Fund manager

Investors should look for opportunities in the unloved region of Europe, according to fund manager Sean Peche, who said there are some “very attractively priced” companies in the region.

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. electoral victory

“At the same time that Europe has been struggling, you’ve had this Trump euphoria,” Peche said. “So everyone has been rushing to invest in the US… But running to the latest and brightest is not usually a good way to make money.”

Peche dismissed investor concerns about France, which… along with Germany — has been in the middle of political turmoil in recent weeks. French President Emmanuel Macron appointed Francois Bayrou as the new prime minister last week after the overthrow of the government of Michel Barnier.

Macron called snap elections in June that yielded a result without a clear majority, sparking months of political chaos and gridlock.

But Peche remains unperturbed. “Maybe the euro will fall apart, probably not. And the companies we have have very attractive prices”, he added.

These stocks include the French bank BNP Paribas —which noted that it has grown in book value (or net worth) consistently—and the Dutch investment bank ABN Amrowhich has a dividend yield of 10.2%. “This is very attractive,” Peche said.

Looking at the UK, the fund manager said shares were “attractive” as of now Associated British Foodsowner of retail giant Primark, were also being ignored by investors.

“Primark is doing very well. It’s a nice, diversified business with (a) great management team. I’m not going to wake up tomorrow and find the management team has done something stupid,” he said.

“They’re attractively priced. We’re getting a good dividend. They’re buying back shares, but it’s out of favor because it’s a mid-cap and UK-listed.”

Peche is bullish on mid-caps on the other side of the Atlantic, such as the US toy giant Mattel.

With household brands like Barbie and Hot Wheels under its umbrella, the toymaker has diversified beyond its core products.

Mattel’s management team has “turned the business around so that debt is now very manageable and they’ve launched a billion dollar buyback”, said Peche.

The release of a new animated Barbie Netflix series in November and a second docu-series in September charting Mattel’s rise gives the toymaker, currently valued at around $6.2 billion, “potential for growth Peche said.

Mattel saw a sharp increase in purchases of Barbie toys after the resounding success of the movie “Barbie”. in 2023, the more box office film that year earned over $1.4 billion worldwide. It has also produced toys for hit movies like “Moana” and “Wicked,” though the latter stuck and was forced to pull its line of character dolls after a package misprint linked to a pornographic website.

In October, both Mattel and competitor Hasbro they lowered their guidance for the end of the year as toy sales fell in the third quarter. Mattel said it expects sales for the final three months of the year to be “comparable to a slight decline” from its previous guidance update.

— CNBC’s Kristian Burt contributed to this report.