Domestically Focussed Stocks Offer Good Value

Dean Tenerelli of T. Rowe Price says investors should snap up quality domestically oriented companies that have been unduly punished by the market

T. Rowe Price 19 August, 2013 | 10:35AM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here Dean Tenerelli, portfolio manager in the Equity Division at T. Rowe Price, discusses why domestically focussed stocks offer investors the best chance at growth.

The recent pickup in European macroeconomic reports has helped rekindle optimism in the European economy as of late. And as growth concerns begin to temper, we are seeing investors exhibiting growing interest in domestically oriented European companies.

Over the last 12 months, I have also shifted somewhat toward companies with greater revenue exposure to Europe, where I have taken advantage of attractive entry points. Simultaneously I have reduced my exposure to globally exposed companies that had performed well and seen valuations run ahead of fundamentals. A prime example of this was Inditex, the La Coruña-based fashion retailer. Despite its unique business model and significant international growth potential, particularly in Asia, I decided to sell the stock early this year because I felt the valuation was no longer attractive.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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T. Rowe Price  T. Rowe Price is a global investment management firm dedicated to helping clients achieve long term success.

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