Politicians in both the U.S. and Europe seem determined to curb the power of Internet companies, while at the same time many Internet company stocks are highly valued. The most important drivers for the future are; consumer behavior, technology and increasing regulations, which creates the future basis for far-reaching changes.
Currently, the Green Deal is particularly important, with its forward-looking themes of climate change, the circular economy and electrification. Wickstrand Iversen states "If the Greens win the federal election or become part of a coalition, they will have a major impact on these fields,". As part of this, he said, the automotive industry is in the midst of the most profound disruption phase since Ford produced its Model T in the 1920s, the best-selling vehicle in the world at the time. The DNB portfolio manager sees enormous opportunities in this transformation. In this regard, he attests that European companies have some catching up to do compared to their counterparts from the United States or Asia.
Volkswagen, for example, will be the world's largest producer of electric vehicles next year
Wickstrand-Iversen continues, "with a price-to-earnings ratio of seven to eight and a fantastic balance sheet, Volkswagen is in a very good position, especially since the group is investing a lot in software and battery capacity." Over the next three to four years, the world's second-largest automaker could become one of the best turnaround cases, the expert said.
Drones optimize agriculture
In view of demographic change, clean food is playing an increasingly important role as the wealthier part of the world focuses more and more on sustainably produced and natural food. Farmers, especially in the U.S. but also in Europe, are investing their money in machinery and equipment. John Deere is one of the largest agricultural machinery manufacturers. According to Wickstrand-Iversen, the U.S. group is very successful and innovative in optimizing agriculture through the use of drones, and testing completely new systems such as self-driving agricultural machinery, which will usher in a revolution in agriculture for years to come.
Last but not least, the fund manager notes a shift from "high expectation names" to value stocks. As an example, he cites Swedish network equipment supplier Ericsson, which is considered a "conservative" stock, but has a very low valuation and high cash flow. "Opportunities are also offered by the exposure to the 5G mobile standard, one of the most important infrastructure topics at the moment. Together with Nokia and Samsung, Ericsson is the leader in the global 5G network infrastructure market."
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