Why Does Blackrock Like Europe So Much?

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Oct. 28 (Bloomberg) –- Blackrock Portfolio Manager Nigel Hart discusses investing in Europe. He speaks with Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

What types of businesses?

Talking about single digits?

I think there has been a lot of restructuring and changes.

In the hotel space, media, entertainment, transportation, there are a lot of interesting single-digit stops.

Restructuring in the changes very key.

What people have missed our a lot of the industries and private companies that disappeared.

The companies that are left are stronger and fitter.

Fit for business, if you like.

The spanish media industry, for example, there are just now to tv industries left, there were five or six before the crash of 2008. those two companies are now looking to get advertising revenue and it is much easier for them with less competition.

Auto sales, here in the u.s. they were on a tear.

It seems like we only just started to receive recovery in europe.

Europe peaked about a year and a half after the u.s., really their cycle is very different, timewise, and then they crashed.

Now we are really seeing stabilization without a lot of growth.

Data last month did show some numbers, stuck, for example, with nine times earnings.

The volume increasing and refreshed product lineup, free cash flow starts to flow nicely into this business.

The dividend yield is the name i am focusing on.

Are you confident that the debt crisis is over for the region that suffered?

I do not think you can always be comfortable when it comes to europe.

That is why we try to do as much research as we can.

Research, research.

When something unforeseen happens you tend to understand how to react.

Looking at the u.s., which is been on such a tear this year, a lot of people think that perhaps this is why we have seen so many getting into europe right now.

The one opportunity that has been beaten down so significantly in europe, how much more upside do you think they see?

In spain the market bottomed in june of last year.

That famous 666 on the s&p, that is up 100 50%. europe is still well behind, especially markets like ireland, spain, and italy.

It is still a good market for stock picking, but logic would dictate that at this stage europe would be a lucrative ground.

The euro stoxx 50 is trading at 14.5 times.

We had a prognosticator advisor strategist, on six or seven months ago, pounding the table on spain saying you have to buy it.

I cannot say how many e-mails and tweets we got from people who said that he was out of his mind.

Are you getting resistance internally at blackrock for pushing into europe gekko i think that valuation speaks for itself.

Spain has made some big changes on labor market reform, wages in afghanistan, 40% to 50% from the high.

There is still a lot to be done.

They do not really have a marshall plan, which is only what they need.

I heard mark on your network earlier today talking about buying from the banks.

The ecb has your back, if you like.

Equities in that environment could still be in place.

Doing whatever it takes, you only have a minute left, you like europe more than the u.s., but not asia or the emerging markets in general, give us cliff notes.

It is where we are finding the cheap stocks.

Emerging markets it is a little bit tough.

A lot of financial institutions and it becomes expensive.

I would not hesitate to buy a cheap stock in the emerging markets as long as i feel comfortable with the business model valuation, but right now europe seems to be the place where we are finding more names than elsewhere.

15 point $2 million over blackrock, great to have your perspective.

Can you remember the days before your smart phone?

Believe it or not, i almost cannot.

Even though i have had this for much longer than people wanted me to.

How much of the world is still clinging to the foot phone?

We will talk about it in the chart attack, next.

? ? well, it is time for chart attack, where we show you a chart.

We have two that we hope we will make you smarter.

Do you have a smartphone?

If not, you are definitely in the minority.

Adam, remember the good old days of flip phones and trying to text a message?

They were pretty cool.

Hold it down three times and you get a c. the stunning thing is we are still selling hundreds of millions of these, but they are becoming a minority.

You can see that 40% of smart phones, all the way through quarter one of this year, we broke across the 50% line and we now sell 51.6%. when you get to the june quarter , the majority of phones, this progression -- international?

Probably even higher, the blue portion.

Absolutely.

This is the concern for companies like apple, the saturation in the developed markets, and it is a great segue, because the growth is coming out of emerging marketplaces.

You know who the leader is?

I want to say apple but i suspect you will tell me know.

Unfortunately it is not.

Looking at global market share you will see the big red or should of the pie is google's android.

This is an operating system that is free for handset makers to make.

Hang on a minute, for all the talk that you and i and everyone else has about apple, ios is only 13% world market share, android is beating them?

Incredible.

Incredible.

They continue to dominate in the low-end marketplace because google provides the operating system for free.

Looking to make a midrange, low- end, even high-end phone, you might choose to use the free operating system.

Also notable is microsoft taking over the number three spot.

Look at how tiny that is.

More of a commentary on how far they have fallen, but to be fair while android has the lions share of market share, apple has the lions share of profits.

They are making the money on fewer devices.

Because that is where the margins are.

The high-end market.

The concern is -- how long does that stay in place as these devices that are good enough start to come into play?

This morning digital times did some work and found out that the profit is $293. by far they are the most profitable company in the space, but the problem is when someone can do something at half the cost and make just a fraction of the prophet, right, do they start to get the prophet?

80% market share is amazing.

You will of course be here for apple earnings.

Coming out at four: 30. we will be watching them carefully.

We have the top 10 stocks you need to know about today, next on "street smart yuriko plus next, dividend payments extending the debt ceiling by the entire month this fall.

Are we sure it is smart to wind down the mortgage giant?

A huge -- heated debate.

Back with the close after this.

? ? if you missed everything that happened today during the sessions, do not worry, the only stocks you need to know about coming up.

Herbalife, number 10, the company is scheduled to report third-quarter earnings after the market close and it appears that carl icahn isn't winning his battle with bill ackman over the life.

We jig herbalife -- herbalife.

Thanks to strong sales of their multiple sclerosis drug, biogen is raising income and sales numbers this year.

Number eight, a drugmaker seeking a buyer after sales of its prostate cancer treatment failed to meet with expectations , denver he on is said to be working with jpmorgan.

Craft, getting a downgrade according to piper jaffray, cutting the stock with spending healthy near-term and the trend.

>-- crocs, getting a downgrade according to piper jaffray, cutting the stock is spending nearly -- healthy near-term and -- with the trend.

Mosaic, the new deal will boost their output in the sector.

Number five is burger king, up nearly six percent after reporting a third-quarter profit that came in above estimates as they sharply reduced restaurant expenses, cutting costs by turning nearly 500 restaurants in two and introducing healthier try -- healthier choices.

Like chips.

If you're going to have fries, go for it.

We all sort of pooh-pooh the idea, but if they really are healthier foods, canned that only be good?

But it is kind of attending, you know?

Skinny girl margarita's. i am not drinking a skinny girl or skinny guy margarita.

Like the new york version of burger king tries.

Right.

50 9 p.m. first, you cannot beat it.

Moving on, directv, up half of one percent, avoiding paying billions of dollars in retransmission fees according to people with knowledge on the matter.

They are moving to an area type of service.

Amc networks are down nearly

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change