Citigroup: Based in New York, Citigroup is the largest financial institution in the U.S. and second largest worldwide in assets ($1.2 trillion). It is one of the most diversified financial services companies by business and geographic footprint. Citigroup has recently lost its historic valuation premium due in part to a host of legal and regulatory issues, concerns about whether the company is too big to manage, and negative operating leverage. We believe Citigroup is an attractive investment because of its relatively low valuation of 11 times earnings, its emerging market franchise, a strategic focus on being one of the largest distributors of financial products, and its large excess capital generation.
Sanofi-Aventis: Based in Paris, Sanofi-Aventis is the world's third largest pharmaceutical company. Challenges in the pharmaceutical industry, including regulatory concerns, patent expirations and legal liability risk, have led to lower valuations for most drug companies. We believe Sanofi-Aventis is an attractive investment opportunity at a valuation of 3.3 times sales. The company has a broad product portfolio, conservative balance sheet, strong free cash flow, and a management team which has worked together for 20 years with a commitment to long-term shareholders.
Vodafone: Based in London, Vodafone is the world's largest mobile phone service provider with over 130 million customers in over 26 countries. When the market peaked in March of 2000, Vodafone sported a staggering price-to-sales (p/s) ratio of 16 times and a market capitalization of $341 billion. Vodafone now has a more reasonable p/s ratio of 2.2 times and a market capitalization of $149 billion. Growth has slowed as the market has matured. Regulatory and technological risks for the company are real, but we believe management is taking active steps to address their challenges. The stock's lower valuation may mean the downside risk for the investment is more limited than it once was.Also check out:
Sanofi-Aventis: Based in Paris, Sanofi-Aventis is the world's third largest pharmaceutical company. Challenges in the pharmaceutical industry, including regulatory concerns, patent expirations and legal liability risk, have led to lower valuations for most drug companies. We believe Sanofi-Aventis is an attractive investment opportunity at a valuation of 3.3 times sales. The company has a broad product portfolio, conservative balance sheet, strong free cash flow, and a management team which has worked together for 20 years with a commitment to long-term shareholders.
Vodafone: Based in London, Vodafone is the world's largest mobile phone service provider with over 130 million customers in over 26 countries. When the market peaked in March of 2000, Vodafone sported a staggering price-to-sales (p/s) ratio of 16 times and a market capitalization of $341 billion. Vodafone now has a more reasonable p/s ratio of 2.2 times and a market capitalization of $149 billion. Growth has slowed as the market has matured. Regulatory and technological risks for the company are real, but we believe management is taking active steps to address their challenges. The stock's lower valuation may mean the downside risk for the investment is more limited than it once was.Also check out:
