Fidelity fund managers pick out stocks for London Fashion Week
Share
Fidelity Worldwide Investment managers Tom Ewing and Sam Morse have given their views on two listed fashion giants for London Fashion Week.
Tom Ewing
Tom Ewing, portfolio manager of the £441m Fidelity UK Growth fund, gave his opinion on FTSE 100-listed company Burberry.
He says: “Burberry is a strong franchise with an excellent management team and robust balance sheet.
“Despite strong growth in recent years, the brand remains under-penetrated in many markets, so there is plenty of potential for growth.”
Ewing adds: “Burberry has a strong presence in China where the rapidly growing middle class is increasing its demand for aspirational goods. Demand from developed markets has also held up well, thanks to the regressive nature of quantitative easing. (article continues below)
“QE has supported financial asset prices, which tend to be owned by the well-off – the people who spend more on luxury items.”
Sam Morse, portfolio manager of the £2.4 billion Fidelity European fund, notes the strong position of Hugo Boss in Europe.
He says: “The Hugo Boss brand is well developed in European markets, particularly in its home market of Germany, but it has not been exploited to its full potential elsewhere.
“A newish management team, who were put in place a few years ago by majority owners Permira, are now delivering on this having done a good job in improving the basic operations of the company.”
Morse says: “Sales and margins are showing evidence of this improvement. Hugo Boss has low levels of debt and a high level of free cash flow, most of which it pays out in dividends so investors are enjoying a generous level of dividend and double-digit dividend growth.”
To receive more relevant articles like this one, why not sign up to our briefings and breaking alerts by clicking here and Follow @fundweb
