If we see higher risk assets further over-valued, do not chase the move, but rather sell into price ...
"Nightly Business" for Templeton
05/06/2005 12:00 am EST
I’m a huge fan of both Paul Kangas and Jeffrey Everett, so I was particularly excited when Jeffrey, CIO for Templeton Global Advisors, appeared as a "market monitor" on Paul’s exceptional The Nightly Business Report. Here are excerpts.
Paul Kangas: "My guest this week is Jeffrey Everett, chief investment officer for Templeton Global Advisors. Welcome back, Jeff. Great to see you.
Jeffrey Everett: Thank you, Paul.
Kangas: Do you feel the US market is getting a bit too pricey or do you see some bargains here?
Everett: Although we see more bargains overseas, we still do see bargains in the US. Three quarters of the Templeton Funds typically right now is invested overseas, but we do see a significant opportunity in the US as well.
Kangas: On your last visit in May of 2004 with us, you repeated buy recommendations on two drug stocks, Bristol Myers (BMY NYSE) and GlaxoSmithKline (GSK NYSE). Bristol Myers just can’t seem to get out of its own way, can it?
Everett: You're right. But Bristol's solid dividend tends to supports the stock, and long-term that is still very, very valuable.
Kangas: GlaxoSmithKline is up over 15% since then, but they’ve had a little bad news recently with the FDA stopping distribution on two of their drugs. What do you think of that?
Everett: Importantly it’s at a 52-week high and the news is not the same negative news that we saw from the Cox 2 companies related to Vioxx and Celebrex. We own these stocks and are still recommending them.
Kangas: How about some new recommendations for our viewers?
Everett: Sanofi-Aventis (SNY NYSE) is a very interesting pharmaceutical stock, In fact, it is one of the fastest growing of the big pharma companies out there. One of the things Sanofi has done very well over the years is restructure. Many people think restructuring is dead in Europe. But Sanofi acquired Aventis last year, which is how we ended up with a big position in the Templeton Fund. And the company recently announced great cost savings as a result of the merger.
Kangas: OK. So that's an ADR on the Big Board. We got time for a couple more.
Everett: Sure. Pearson (PSO NYSE) is a media stock in the UK. The company is involved in everything from educational textbooks to the Financial Times . It has very, very underused assets and under earning assets. They’re looking for a new chairman. We believe very strongly, great balance sheet, great assets, long-term very strong earnings potential.
Kangas: We have time for one more.
Everett: We like Kookmin Bank (US:KB NYSE) in Korea. The Korean banking sector is now coming back from the dead. Kookmin is the largest, with 30% of the market and 24 million customers. The entire sector is doing what the Japanese banking sector did a few years ago, and the stock is still very cheap.
Kangas: These are American depositary shares that trade on the Big Board?
Everett: All three of those have ADRs.
Kangas: OK. So you can get them through your local broker. Do you own all three of those?
Everett: The Templeton funds have significant weightings in all of these names we've discussed.
Kangas: Jeff, thanks very much for being with us again."
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