Top Fund Manager Says Brazil, China Still Have Edge

What is your favorite sector?

Maisonneuve: As a stock picker, it all comes down to the ratio of relative valuation to expected growth trends for each stock. Currently, we find attractively priced growth in names like Syngenta(SYT) as we believe that soft commodity prices will support the company's earnings growth.

We also like Denway Motors, a car manufacturer in China with a joint venture with Honda(HMC). It is benefiting from the Chinese government's tax-support program to encourage car sales and from middle-class income growth. We also like British Gas, a U.K.-based gas producer and developer. It has a very attractive valuation and it's a beneficiary of climate change.

What is your top stock pick?

Maisonneuve: Swire Pacific is a Hong Kong-based company involved in real estate, transportation, consumer products, industrials and marine services. It has an upside to fair-market value of over 20% and sells at an attractive price-to-growth ratio of 1.3 times. It is a strong beneficiary of Chinese economic revival and of its impact on Hong Kong. It is a well-managed company with a conservative balance sheet.

What is your favourite "sleeper" stock pick?

Maisonneuve: Teva(TEVA) is one of the world's largest generic-drug manufacturers. It also has a proprietary drug for multiple sclerosis -- Copaxone. The company is a beneficiary of long-term demographic trends as governments around the world, in an effort to lower health-care costs, are increasingly in favor of generic drugs. With a strong balance sheet and management team, earnings trend growth over the next three to five years of 30%, and a current P/E valuation below 12 times, the stock is a core holding in the portfolio.

What sector, industry or stock would you avoid?

Maisonneuve: I would avoid regulated utilities in Japan and Europe, as the earnings prospects for those are very limited and valuations are not that appealing.

-- Written by Gregg Greenberg in New York.

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