Joseph P. Joseph and Randy J. Farina, Portfolio Managers, August 29, 2013
While we believe risks in global markets are not trivial, when we review international markets for contrarian opportunities, Europe is a place where value may be available.
Equities in Italy, Spain, and Portugal — countries that were at the epicenter of the European fiscal crisis a year ago — are beginning to look more interesting to us on a relative basis [For commentary on credit conditions in peripheral European bond markets, read Fixed-Income Outlook or Capital Markets Outlook]. On balance, the level of fear attached to these countries has come down significantly.
Some of the biggest risks that beset Europe with varying degrees of urgency in 2012 — such as a potential breakup of the European Union and a failure of the euro currency — appear to have been curtailed by the efforts of eurozone policymakers.
As we evaluate opportunities in this region, a number of infrastructure companies domiciled in Italy, Spain, and Portugal, for example, are beginning to exhibit attractive characteristics.