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'Best opportunities for two years’ investors told

'Best opportunities for two years’ investors told

Category: Investments

Updated: 24/08/2011
First Published: 24/08/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The recent market falls have provided the best opportunity to invest in equities since March 2009, according to a leading fund manager.

Sanjeev Shah, manager of the Fidelity Special Situations fund, believes now is a good time to buy stocks with the current level of fear amongst investors throwing up some outstanding opportunities for those investing over the long-term.

Shah argues that there are many individual shares which are attractively valued at present, for a variety of reasons.

"Many stocks are trading at historically low multiples of earnings and offer attractive dividend yields in what is likely to remain a low-interest rate environment," he explained, while adding that corporate balance sheets are in much better health than two years ago.

He also expressed his opinion that shares look good value compared with other asset classes.

While admitting that banks have not performed well of late, Shah suggests there is 'unprecedented value in many areas', and picked out Lloyds as a shining example he is backing.

He also expressed his belief that opportunities exist in companies which can demonstrate sustainable sales and earnings growth, but which are not currently being priced at the premium they deserve.

While conceding that such 'growth names' might be unloved and unfashionable, he name-checks BSkyB, Ericsson, IG Group and Ocado as the companies that he is currently backing.

Shah also revealed that his approach has been to invest in companies that would normally perform well in the early stages of an economic recovery.

In this regard, he picks out Wolseley, a heating and plumbing distributor which should perform well off the back of a long term recovery in the US housing market.

Marks & Spencer, Home Retail Group and Kingfisher were also picked out by Shah as ones to watch should, as expected, interest rates remain low for a sustained period.

"The fall in share prices has shaken investor confidence this summer but, for an investor who likes to go against the flow, this represents the best opportunity in more than two years to find new opportunities or to add to positions," Shah concluded.

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