A $43 Billion Value Investor’s Winning Formula For Buying Unloved Foreign Stocks

Sarah Ketterer’s Causeway Capital is trouncing the competition using a mix of quantitative and fundamental analysis to find bargains among European stocks like Rolls-Royce and Ryanair.

_{By Hank Tucker, Forbes Staff}

Inthe 15 years since the Great Recession, American exceptionalism has carried the stock market. Since the beginning of 2009, the S&P 500 Index has soared nearly fivefold, while the Euronext 100 tracking the performance of Europe’s largest stock exchange is up a more modest 145%, or a mere 6.3% annually.

Sarah Ketterer, CEO of Causeway Capital Management, thinks most of the gloom is in the past for international stocks and is now eyeing a buffet of companies with glaring valuation gaps compared to U.S. peers. The Los Angeles-based firm managing $43 billion is already outperforming with its portfolio of undervalued stocks it selects through a blend of quantitative screens and fundamental analysis.