METROPOLE Sélection P
ISIN Code FR0010988758
NAV 264.39 €
Morningstar : 3/5
Documents to be downloaded
Main investment cases for underpriced European stocks (25 lines max.)
The fund management team: Ingrid Trawinski, Yann Giordmaina, , Thibault Moureu, Isabel Levy, Markus Maus, Fredrik Berenholt, Cédric Hereng.
European equity markets fell in December. The drop in oil prices and the elections in Greece were the two biggest triggers of the downturn.
The securities held in portfolio were predominantly affected by the substantial M&A activity over the month: retail group Kingfisher sold its loss making Chinese operations to its local partner. In the construction sector, CRH sold a UK subsidiary with a high price tag. Saint-Gobain bought out Swiss group Sika. The deal was finalised at a very high valuation multiple, i.e. 3x revenue and an operating margin of 10%. The Saint-Gobain share lost 4% as a result. In the tech sector, Atos snatched up US group Xerox's ITO business. Atos' share price subsequently soared 16% due to the low purchase price and major synergies on the horizon. Finally, the telecom sector continued to consolidate in December, with BT Group announcing the takeover of UK mobile operator EE at 7.9x EBITDA.
Against this backdrop, the fund outperformed its benchmark index in December.
We were very busy this month: we took profits on Intesa Sanpaolo, which gained 35% in 2014. We closed our position in Banco Popolare given its weak catalyst. We also reduced our exposure to GlaxoSmithKline. We increased the weight of our positions in HedelbergCement and Adecco in light of their significant undervaluation. We also shored up our exposure to the telecoms sector by starting a position in undervalued Vodafone at 6.9x EBITDA. We also sold the Hermès International shares that had been distributed by LVMH.
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