The S&P 500 index is down 2.0% on Thursday after the U.S. said satellite evidence suggests Russia plans on invading Ukraine in the coming days, but Causeway Capital Management’s Ellen Lee says the following non-U.S. stocks will perform well regardless of the rising geopolitical tensions.
Compass Group plc (LON: CPG)
The contract foodservice company took a massive hit due to the global pandemic but the stock price has now returned to where it was in February 2020.
Lee sees CPG as a reopening play – a stock that will further benefit in the coming months as the world continues to emerge from COVID restrictions. Solid growth, reliable management, and the fact that Compass Group has turned to outsourcing again were among other reasons why she’s bullish on the stock.
Unilever plc (LON: ULVR)
Shares of the British multinational consumer goods company are down close to 15% from its high in July 2021. Trading at a PE multiple of 19.58, Lee is convinced that ULVR is an inexpensive stock. She wrote:
Unilever has strong brands, heavy exposure to fast-growing emerging markets, and a sizable 4% dividend yield – all the while trading at an earnings multiple in line with the broader market.
Rolls-Royce Holding plc (LON: RR)
The luxury car cum aircraft engines manufacturer is the largest position for Causeway Capital Management at present. The stock is tied to the travel recovery that still has a lot of room to run.
Lee agrees the recent capital raise made shareholders nervous but says it helped beef up the company’s finances. Shares are still priced at only about half of what they were worth before the pandemic.
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