In a recent Bloomberg’s interview, Atlantic Investment Management’s Alexander Roepers discussed his market expectations, which he already shared in a report published a month ago. Namely, the word is about rotation to value stocks, which he anticipated three years ago as well. When asked about why he thinks the rotation is now more imminent than it was in 2016, he said that 2016 was the year with “a lot of upheaval in the markets” and he found that to be an inflection point, which, in fact, it did lead to some rebound in value stocks that lasted for a year and a half. Then again in the new lights of tariff wars and Brexit issues, investors started turning back to large-cap tech and story stocks. Now, the situation seems to be different as there are “the incredibly compelling opportunities created by this equity market dynamic.” Near the end of his report, Alexander Roepers pointed out that even though the US/China trade war settlement is not on site, he believes the dispute won’t grow further. Another political issue that directly affects the market environment is Brexit, and he thinks that any advancement in the ongoing situation is likely to “cause a material economic uplift, benefiting equities globally and, in our view, value stocks in particular.” Hence, in conclusion, he advised investors to stay long mispriced value stocks.
In the interview, he also talked about his active position in the world’s biggest bottle manufacturer, Owens-Illinois, Inc. (NYSE:OI). According to him, the company should sell its European business for approximately $3.5 billion in cash, which can further use to clear its debt, repurchase its shares and double its share price in the end. More details from the interview, you can find in the video below.
Looking at the Atlantic Investment Management’s 13F portfolio, its biggest position at the end of March was in already mentioned Owens-Illinois, Inc (NYSE:OI) as the fund held 4.25 million company’s shares with a value of $80.64 billion, comprising 20.6% of its portfolio. The second biggest stake was in Eastman Chemical Company (NYSE:EMN), worth $56.40 billion on the account of 743,279 shares. In Huntsman Corporation (NYSE:HUN) Atlantic Investment Mangement held $56.12 billion worth a position, on the basis of 2.5 million shares outstanding. The remaining two of top five holdings the fund held at the end of the first quarter were Avnet, Inc. (NASDAQ:AVT) and DXC Technology Company (NYSE:DXC), in which the fund reported $47.52 billion worth a stake counting 1.1 million shares and $46.43 billion worth a position based on 721,968 shares, respectively.
This article is originally published at Insider Monkey.