Bloomberg Talks
Harris Associates’ David Herro Talks Global Equities, American Productivity
Feb 13, 2024
David Herro, Harris Associates Deputy Chairman, Partner and International Equities CIO, discusses the European banking sector, the economic outlook on the continent, undervalued German companies in the stock market, challenges for value investors in the Japanese market, and the uniqueness of America attracting immigrants seeking economic freedom.
08:31
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Quick takeaways
- European banks are now fully capitalized and generating profits, leading to potential earnings growth and increased shareholder returns.
- The Japanese market has lower valuations and rising profitability, but the average return on equity for Japanese companies lags behind the rest of the world, making it challenging for value investors to find opportunities.
Deep dives
European Banking Sector Offers Value
European banks have overcome challenges from the sovereign debt crisis, and are now fully capitalized and generating profits. With higher interest rates and capital being generated, there is potential for earnings growth and increased shareholder returns. Despite concerns about the European economic outlook, companies such as SAP and Siemens offer global businesses at depressed valuations, making them attractive investments.
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