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  • March 6, 2018
    Equities
    The waiting game - four turnaround stocks in Europe
    James Rutherford
    Stock markets are capricious in the short-term. Unexpected news flow and temporary factors can trigger bursts of share-price volatility, but leave the long-term fundamentals of companies intact. This is illustrated well by the performance of Pandora, ConvaTec, Nokia and Siemens Gamesa in the last year. While European equities rebounded strongly in the past 12 months as the region’s economic recovery deepened, these four stocks faltered. James Rutherford, Portfolio Manager and Martin Todd, Co-Manager, Hermes European Alpha, at Hermes Investment Management explain why they decided to retain – or add to – these positions and maintain focus on the companies’ prospects for long-term growth. “We aim to not be driven by emotion, but instead examine adverse issues influencing a company’s performance. We seek to understand the nature of these issues – for example, whether they are structural or temporary – and whether we can see a clear road to recovery. This requires discipline and patience, and ultimately helps us look beyond short-term turbulence and keep an evidence-based faith in the ability of our holdings to outperform.”
  • February 22, 2018
    Equities
    Keeping The Faith: Four Turnaround Stocks In Europe
    James Rutherford
    Four holdings in the European Alpha Fund missed out on a share of the spoils in 2017 – a vintage year for European equities – as they were pummelled by temporary pressures. We looked beyond this volatility, maintaining our focus on the companies’ prospects for long-term growth. As these pressures begin to ease, we ask: have these stocks turned a corner? Stock markets are capricious in the short-term. Unexpected news flow and temporary factors can trigger bursts of share-price volatility, but leave the long-term fundamentals of companies intact. This is illustrated well by the performance of current holdings Pandora, ConvaTec, Nokia and Siemens Gamesa in the last year.
  • January 22, 2018
    Equities
    European equities revisited- The outlook remains bright
    Martin Todd
    A year ago, amid widespread scepticism, we argued for a renaissance in Europe. In 2017, the eurozone recorded its fastest rate of economic growth in a decade, confidence soared and stocks rallied. Today, Martin Todd, Co-Manager, Hermes European Alpha at Hermes Investment Management, revisits the case for European equities and asks: is the future still bright for the region? Europe entered 2017 against a backdrop of political uncertainty. Many investors feared anti-establishment electoral threats as the region braced for a slew of high-stake elections in the UK, Germany, the Netherlands and France. At the same time, we argued in favour of European equities in our commentary, “Why European equities?” The central premise was that the market provided attractive opportunities given that negative sentiment overshadowed the region. We also highlighted that companies are not the economy or the politics of any nation.
  • January 17, 2018
    Equities
    European equities revisited: The outlook remains bright
    Martin Todd
    A year ago, amid widespread scepticism, we argued for a renaissance in Europe. In 2017, the eurozone recorded its fastest rate of economic growth in a decade, confidence soared and stocks rallied. Today, we revisit the case for European equities and ask: is the future still bright for the region? Europe entered 2017 against a backdrop of political uncertainty. Many investors feared anti-establishment electoral threats as the region braced for a slew of high-stake elections in the UK, Germany, the Netherlands and France. At the same time, we argued in favour of European equities in our commentary, “Why European equities?”. The central premise was that the market provided attractive opportunities given that negative sentiment overshadowed the region. We also highlighted that companies are not the economy or the politics of any nation.
  • June 27, 2017
    Equities
    Adidas - A manifesto for investor returns
    Between luxury and mass-market, there is a segment that marketers call “masstige” –prestige for the mass market – which is defined as “premium but attainable” according to Chi Chan and Martin Todd, European Equities Portfolio Managers at Hermes Investment Management. This usually refers to a dilution of a high-end brand (think of the diffusion lines like Armani Exchange for Armani or Miu Miu for Prada), but it can also be the upscaling of a mass market category.
  • February 2, 2017
    Equities
    Why European equities?
    Martin Todd
    Investors have retreated from European stocks throughout 2016, with market sentiment close to its lowest level since the 2011-2012 sovereign debt crisis. Then, as now, political and macroeconomic uncertainty was the source of their anxiety. Amid continued economic torpor, a range of political pressures – including Brexit, the rise of anti-establishment movements that threaten the European construct, and social tensions caused by the migrant crisis – have spurred investors to pull up to €100bn from active European equity funds this year.
  • January 3, 2017
    Equities
    European Equities Outlook 2017
    Martin Todd
    In this video Martin Todd talks about the outlook for European equities in 2017.