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ONE INVESTOR'S MOST-FAVORED NATIONS--AND STOCKS (int'l edition)David Herro, Chicago-based manager of the Oakmark International Fund, combs the world to find bargains in stocks--many of them little-known smaller issues. He took a few minutes recently to talk about the markets and stocks he likes the best, and least.
ON HIS FAVORITE COUNTRIES: Australia and New Zealand. ``This is a growth region but they're forgotten markets. Both are selling cheaply due to high real interest rates, which are unsustainable.''
ON HIS FAVORITE STOCK: ``National Australia Bank. It trades at eight times earnings, yields 7 1/2%, and by any measure is the quality pick of the Australian banking sector. It's a no-brainer.''
ON EUROPE: ``It's a value story, and now the factors are in place for that story to be realized.''
ON EUROPEAN STOCKS TO WATCH: ``SSAB, a small specialty steel producer in Sweden, with extremely high margins and a big distribution system. Telefonica of Spain, a very cheap phone company with good assets in Latin America. Guinness [in Britain], a cash flow machine.''
ON JAPAN: ``I can't find any reason to be there. When I look at a table of foreign direct investment, no one is investing in Japan because costs are so high relative to the returns. Companies are being run for managements, employees, or customers--not for investors.''
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Updated June 14, 1997 by bwwebmaster
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