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CASHING IN ON EUROPE'S RESTRUCTURING WAVEThe Dow is near a record high, but is Mark Holowesko a Wall Street booster? No way. The manager of the $10.1 billion Templeton Growth Fund and a disciple of legendary value investor Sir John Templeton, Holowesko admits that as stock prices have soared, ''it has been very difficult to find new ideas in the U.S.'' But Holowesko, a Bahamian resident who picks stocks from his home base in Nassau, thinks that overseas bourses still haven't caught up with Wall Street. So Holowesko has slashed his fund's holdings of U.S. stocks to 23% of its assets from 55% only two years ago. Holowesko is especially enthusiastic about investing in Europe, despite recent political tensions in France and Germany spawned by attempts to launch a single European Union currency. What turns Holowesko on is a wave of corporations swiftly moving to regain global competitiveness. ''The restructuring of Europe is proceeding,'' he says. He especially likes Britain, the home of ''a lot of cheap stocks'' offering high yields, rapid earnings growth, and modest price-earnings ratios. Among them is National Westminster Bank PLC, selling at 12 times earnings with a 4.5% yield. Holowesko also favors British Telecommunications PLC, which is trading at a p-e of 13 despite its 4.5% yield, estimated profit growth of 15% a year, and plans to merge with America's MCI Communications Corp. Holowesko, whose fund returned 21% last year and is up an additional 11% through May 30, is also buying stocks of paper makers worldwide. He likes Fletcher Challenge Paper of New Zealand, whose American depositary receipts trade on the New York Stock Exchange. Holowesko also maintains that the stocks of many European manufacturers now are selling for less than what it would cost to rebuild their plants from scratch. For example, Scandinavian papermakers are trading at 20% under replacement costs. One that fits this description is Mo & Domsju of Sweden, better known as MoDo. However, while he is a global bull, Holowesko continues to shy away from Japan--a market that the Templeton funds had largely fled before the 1980s bubble economy went bust. Not that some stocks aren't tempting. Hitachi Ltd., notes Holowesko, ''has phenomenal assets that are not reflected in its stock price.'' But his stake in the giant electronics maker has gone nowhere. ''If Japan were a company, I don't see why you'd buy it,'' he says. He thinks there are plenty of other markets where stocks remain cheap--though they may not remain so for long.
By William Glasgall in New York
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Updated June 15, 1997 by bwwebmaster
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