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The Emerging Market Consumer Is Not Dead - Jim Kee

posted 30 Jul 2013, 11:06 by Mpelembe Admin   [ updated 30 Jul 2013, 11:06 ]

 

Reuters Market Video - 
ANCHOR,

Alright. Let's switch gears to perhaps a safer area or non-controversial and that's Hain Celestial. What it is about that company, a consumer product name?

JIM KEE PRESIDENT OF SOUTH TEXAS MONEY MANAGEMENT

Hain, it's a consumer staple. It does a lot of organic foods, natural foods. It's very well niche in where a lot of US and global consumers are going. Frankly, defensive stocks are very expensive, but you need to own some. At South Texas Money Management, we are a very devout followers of a diversified strategy. And so Hain is one way to get your defensive exposure in a company that's growing, isn't overpriced and has a really strong future.

ANCHOR,

It did hit a 52-week high a couple of weeks ago.

JIM KEE PRESIDENT OF SOUTH TEXAS MONEY MANAGEMENT

Yes. Nevertheless, we still get 15% to 20% upside pretty easily based on just what I would say are plausible assumptions for the stock.

ANCHOR,

Other areas you like include big pharma. Is that a dividend story for you?

JIM KEE PRESIDENT OF SOUTH TEXAS MONEY MANAGEMENT

That is partially a dividend but more of a global growth emerging market story. You know the emerging markets are not growing like they were including China but the emerging market consumer is not dead. And I think when that growing middle class, which I still think is very much alive, you know one of the things they want is consumer staples and healthcare. So a lot of these big drug companies are exposed. There are some non-US companies like Sanofi in France have a lot of emerging market exposure. That's the way we think you should play it.

ANCHOR,

Jim, do any of your ideas change when interest rates start rising in a significant way?

JIM KEE PRESIDENT OF SOUTH TEXAS MONEY MANAGEMENT

Well, it depends on whether the rise is kind of the expected, you know, elimination of the term premium that the Fed had been engineering versus unanchored inflation expectations. We haven't seen that, and that's what would create a really big spike in interest rates.

ANCHOR,

You do like regional banks too, right? You're looking around to try to add to your portfolio there?

JIM KEE PRESIDENT OF SOUTH TEXAS MONEY MANAGEMENT

We do. We like Zion which is out west. It's got a lot of cash, it's well poised for a steeping yield curve environment and that's exactly what I think we and everybody else anticipate in the fixed income markets.


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