Mastercard, Google Top Fund Manager's List
Wall Street may be buzzing about Facebook's impending IPO, but Daniel O'Keefe, portfolio manager for the Artisan Global Value Investor Fund(ARTGX) , says all the excitement is only making shares of the social network's competitor Google(GOOG) all the more attractive.
"Facebook is supposedly coming out at $100 billion. Meanwhile, Google is valued close to $200 billion with more than ten times the revenue, profit and free cash flow. It is a business that has been tested and has long term growth and I'll take it over Facebook at that valuation any day," says O'Keefe.
The $103 million fund, which garners 4 stars from Morningstar, is up 4.6% over the past 12 months, putting it in the top 10% of Morningstar's world stock category. Over the past three years, the fund has returned an average of 25% annually, outpacing 80% of its Morningstar rivals.
Switching from the internet to oil majors, O'Keefe says he is filling up his fund with shares of Total(TOT) because of its cheap relative valuation.
"It's a global E&P business trading at the lowest multiple in the industry and I believe its trading at that kind of valuation because it happens to be listed in France. People don't want to own European companies, even though economically it's no different than say BP or ExxonMobil in terms of where its cash flows are coming from," says O'Keefe.
Staying in Europe, O'Keefe is also bullish on British grocery store chain Tesco despite worries that austerity will seriously affect consumers purchasing habits.
"They have a dominant market position in the United Kingdom, so while they may be losing a little bit of market share there due to the economic environment, fundamentally it's a very strong business. Meanwhile, they are growing very strongly outside of Europe and given the valuation, it's very attractive," says O'Keefe.
Back in the U.S., O'Keefe is also charging into Mastercard(MA) as the secular change to a cashless society continues to unfold.
"Over 85% of the world's transactions still take place in the form of cash and checks and over time that's going to move towards electronic forms of payment. This is one of the best businesses in the world and so it's fantastic to be able to buy it at a reasonable to attractive multiple," says O'Keefe.
Finally, O'Keefe is a fan of Signet(SIG) , saying that yes indeed Americans are buying jewelry even during the downturn.
"They are the biggest operator and they have national advertising which nobody else has, so they are able to get more people into their stores and take market share. And we think they will be able to continue to do that," says O'Keefe.