This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

European Stock Selloff 'Overdone,' GMG Says

NEW YORK ( TheStreet) -- The worry over Europe's debt crisis is creating great buying opportunities, says Oliver Pursche, manager of the GMG Defensive Beta Fund (MPDAX), who owns shares of drugmaker Novartis (NVS - Get Report) and consumer-goods company Unilever (UL).

The mutual fund, which was started in August 2009, has returned 5.3% over the past year, compared with 1.1% for its peer group in the alternative asset-allocation category. This year, the GMG Defensive Beta Fund is down 5.4%, twice that of its rivals.

The fund has in its top 10 holdings three commodities exchange traded funds as well as International Business Machines (IBM), Caterpillar (CAT) and Apache (APA).

With all the negative headlines surrounding Europe's economy, why are you growing more positive on European stocks?

Pursche: The European story is a little bit overdone. You have to bifurcate between southern Europe and northern Europe. Everything is being dragged down as a result of the Greek debt crisis. That's going to play itself out in the coming weeks and we are finding some pretty attractive values in Europe as a result of the overall sell-off.

U.S. health-care stocks have done tremendously well in the first half. Why are you going overseas and buying Swiss-based Novartis instead of loading up on a domestic name?

Pursche: Novartis isn't facing some of the patent-expiration issues that some of the American players are facing. Also, you are getting a little higher dividend yield which is very, very important to us from a total-return perspective. And, additionally, as a result of the European sell-off, there's just some great values there and we look at Switzerland, in particular, as truly being insulated from the entire European debt crisis. The fact that we are talking about the Swiss franc, and not the euro, is great because you get that extra layer of protection.

There is clearly a lot of pressure on consumers right now. They might be getting away from brand names. What does that mean for Unilever?

Pursche: Unilever is a name that's very well-diversified. It goes back to our overall theme in this environment that we think the uncertainty is going to persist. We want to stick with high-quality names that are well-diversified in their businesses, have strong cash flow and have a history of raising dividends. Unilever is one of those companies that fits that profile.

What advantages in the energy market do you see Total (TOT - Get Report) having?

Pursche: Total has done a great job at managing their margins. In an environment where margins are fluctuating for oil companies and distribution companies, Total has been very steady. That's very impressive to us and it shows real strength in management.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
NVS $98.61 -2.67%
TOT $49.66 -2.13%
UL $41.71 -2.57%
AAPL $124.43 -1.54%
FB $82.22 -1.18%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs