A professional investor tells us where he'd put his money now. This week: Malte Heininger of Carmignac's Long-Short European Equities Fund.
Europe is in a structural growth crisis. The world is gradually shifting from the "old economy" to the "new", technology-driven one, and the European presence in this crucial sector is underwhelming, particularly among larger companies.On this side of the Atlantic there is a distinct lack of companies on a par with the FANGs (Facebook, Amazon, Netflix and Google, now Alphabet) major innovators that have upended traditonal markets and created new ones. Plenty of old-economy champions are feeling the cold winds of disruption thanks to digitisation and changing consumer behaviour.
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Expanding overseas
One company that stands out in this context is Asos (Aim: ASC), a leading online apparel retailer in Europe. The outlook is encouraging: it has ample scope for growth in the next few years as the global online apparel sector is still underpenetrated.
What's more, Asos provides a first-class customer experience. The company's products are highly valued by clients, there is a huge assortment to choose from, and delivery times are fast. Asos also has a strong management team and a great track record of development. The company started in the UK, has expanded across Europe, and is now also entering the US.
Strong commitment to growth
Puma (Frankfurt: PUM) has also become avery compelling investment case. Although it is the number-three global sports brand with high brand recognition globally, it lags behind Nike and Adidas with only 2% market share. After experiencing success in the early 2000s, Puma then endured a difficult period, with rivals gaining market share in the keyrunning-shoe segment, for instance.
However, it has now turned the corner.In the last two and a half years, Puma's investment in its performance and promoting the brand has borne fruit:last quarter, it reported 22% organic growth with increasing margins. Moreover, the company is now also entering the North American market for basketball products in a move that demonstrates its commitment to future growth.
Attractive long-term prospects
Qiagen (Frankfurt: QIA), a fast-growing molecular diagnostics company, which addresses unmet medical needs through science and technology development, is another promising company. Healthcare as an industry lends itself to innovation, and given the non-cyclical aspect of the wider sector, biotechstocks will provide investors withstable returns in what is an increasingly volatile environment.
Qiagen has attractive long-term prospects given its strong positioning in growth markets such as biodata and companion diagnostics, and a high percentage of its revenues are recurring. We're not the only ones who foresee a bright future for Qiagen: the stock has outperformed the market so far in 2018.