Evermore Fund Enters Europe as Others Leave

SUMMIT, N.J. (TheStreet) -- Investors fleeing Europe are leaving behind long-term opportunities such as Germany's Siemens(SI), says David Marcus, who helps manage the Evermore European Value Fund(EVEAX).

The mutual fund is down about 4% since its launch at the start of 2010, according to Morningstar(MORN).

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.

What's the state of Europe's economy and finances?

Marcus: The European countries are going through dramatic change. Investors have been running out and selling indiscriminately. So in the midst of that, we are going in. We are seeing great opportunities amongst the rubble they are leaving behind.

Will the Europeans be able to live with austerity, because that's going to result in slower growth?

Marcus: They are working aggressively toward reducing these budget gaps. Are they going to get there? We don't know. But they are working toward them, whereas in the past, they were working against them. That's a dramatic change. And we are focusing on the specific companies that can do well despite the reduced spending from these governments.

One stock you like is Siemens, the big German exporter.

Marcus: Siemens is a 160-year-old business. It's going through the greatest restructuring since the company began. They realize that the world has changed and that in the future, the growth is not going to be Europe first, U.S. second and Asia third. It's going to be Asia first, U.S. second and Europe third. And so they are moving the whole company to focus on exactly that. They are shifting production out of Germany. They are consolidating factories and are generally making all the right moves.

Another company you like is French conglomerate Bollore.

Marcus: Bollore is a 180-year-old business based in Paris. It has businesses from being the largest distributor of home-heating oil in France to making batteries for electric cars and has an amazing portfolio for that. They also have a stock portfolio with businesses in advertising, media and newspapers and TV. But really one of the most exciting businesses they have is their logistics and ports business. They own or control over 50 ports on the African continent.

European bank stress tests are over, creating some relief. Is now a good time to get into banks?

Marcus: We think that it is, but selectively. We are bottom-up, always. We own Lloyd's Bank(LYG) in the U.K., which was one of the bailed-out banks. The British government today owns 43% of Lloyd's. We own both the equity and certain tranches of the debt that we find compelling where we are getting very high yields. Generally, investors are still afraid of banks and financials and are shying away, and that's creating opportunities because they are so undervalued.

-- Reported by Gregg Greenberg in New York.

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