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Volkswagen, Sumitomo Ready to Ride Higher

Stocks in this article: VLKAY STITX

NEW YORK ( TheStreet) - Investors looking to ride the global recovery should consider jumping into shares of Volkswagen (VLKAY) and Sumitomo Corp., says Chad Deakins, portfolio manager for the RidgeWorth International Equity Fund (STITX).

The $266 million fund, which garners three stars from fund rater Morningstar, has returned 13.5% in the past year.

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

What is your view of the global economy?

Deakins: The global economy is growing slowly. I think the central banks will remain in easing mode until growth picks up and global unemployment falls. This should support the equity markets for another few years.

Our fund has outperformed mainly from stock selection. We employ a value with a catalyst approach in the RidgeWorth International Equity Fund and the volatility in Europe has given us opportunities to enter into some attractive stocks at good levels.

Based on that outlook, what is your top stock pick?

Deakins: We run a diversified portfolio, from both a region and sector viewpoint. We generally have a group of stocks we like the best and those are our top holdings. We don't take really large positions in any one name.

However one of our larger holdings that I really like is Volkswagen. The company has one of the best geographical exposures to growing auto markets especially in Asia and Latin America with improving potential in the US market. They are unlike others as they combine scale and a multi-brand portfolio with a global footprint.

They also benefit from their price leadership and technology, all while trading at a discount to its peers. Volkswagen has a full product pipeline going into 2013 and strong brand portfolio across all segments. Their modular platform strategy is way ahead of their peers and that gives them a cost advantage. It has a strong balance sheet with potential dividend increases on the horizon. Shares have performed quite well lately, but continuing strong operating performance and attractive valuation should keep the shares outperforming.

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