Daniel O'keefe on emerging markets
From Daniel O'Keefe: Morningstar International Stock Fund Manager of the Year · · WEALTHTRACK
“Emerging markets right now are at a generally low multiple, and record you know, at least over the last seven or eight years a record discount on a P/E basis to the developed world, something like four points on the multiple. And so that gets our attention. In the emerging markets, you have an average P/E of, let's say, 11, and that is comprised of some really, really good companies trading at high multiples and some really kind of low-quality leveraged businesses trading at low multiples, and so we haven't found anything that's cheap and high quality.”
On , Daniel O'keefe, MD and Lead Portfolio Manager of Global Value & Select Equity Strategies at ARTISAN PARTNERS ASSET MGMT, spoke about emerging markets during Daniel O'Keefe: Morningstar International Stock Fund Manager of the Year on WEALTHTRACK.
About Daniel O'keefe
In a 2014 interview, Daniel O'Keefe discussed his value investing approach, describing it as seeking businesses that are cheap relative to long-term intrinsic value, have a competitive advantage, a strong balance sheet, and a management team aligned with shareholders. He noted that after significant market gains in 2013, many bargains had been "wrung out of the market," but he found emerging markets attractive due to their low price-to-earnings multiples relative to developed markets. O'Keefe also highlighted specific holdings, including financial stocks such as American Express, BNY Mellon, ING Bank, Lloyds Bank, and Royal Bank of Scotland, which he said were added during or after the financial crisis. O'Keefe used Google as an example of distinguishing between statistical cheapness and fundamental undervaluation, noting that the firm bought it at 12 times earnings in 2008. He criticized Google's corporate governance and capital allocation decisions, such as the Motorola acquisition and the purchase of Nest, while acknowledging the strategic rationale behind investments like Android. He also discussed the risks in banks, stating that low price-to-earnings multiples do not necessarily indicate true value due to high leverage and potential credit risks.