Ajay Mehra, CIO and Founder, Foresight Global Investors
Ajay Mehra is Founder and Chief Investment Officer at Foresight Global Investors.
Prior to founding Foresight, Dr. Mehra was Managing Director and Head of Equities at Salient Partners where he created and managed the firm’s global equity strategy.
Dr. Mehra also was Managing Director and Head of Manager and Fund Research at UBS where he rebuilt the firm’s manager and fund selection platform and advised on over $300 Billion in assets.
Previously, as a Partner and Portfolio Manager at private equity firm Columbus Nova, Dr. Mehra co-managed a global macro fund and a long biased global equity fund.
Prior to that, he was Managing Director and Head of Equity Research for State Street Research, where he was the lead portfolio manager for a Health Sciences fund (selected as the Lipper Best Health Sciences Fund 2003 and 2004) and a Large-Cap fund.
Dr. Mehra first started managing institutional money at Columbia Management Group where he was a Senior Vice President and Portfolio Manager covering Media, Telecom, and Consumer and Healthcare sectors.
He started his Wall Street career at Morgan Stanley where he was the firm’s ranked Consumer Products analyst.
Before coming to Wall Street, he was Assistant Professor of Strategic Management at West Virginia University’s College of Business and Economics. He received B.S. and MBA degrees from Panjab University in Chandigarh, India, and received a Ph.D. from the University of Massachusetts.
His experienced perspective on global markets leads to some interesting investment decisions.
“I think the most important thing is that in the U.S., of course, the markets had this tremendous run with huge multiple expansion and a very narrow market.
So, for most people the question is, should they cash out or should they stay in.
Globally, I would say that there’s a little more sense of cautious optimism because the U.S. is basically almost 70% of the global market capitalization now.
It’s about a quarter of the global economy.
So, maybe some of the global markets can catch up, but that also depends on the dollar.
The dollar has been very strong also.”
The next phase of this current bull market may well be overseas.
“I think the administration’s business friendly approach is already discounted in the marketplace.
I think the uncertainty remains with respect to tariffs.
There’s probably more bark than bite.
There’s some concern about the deportations — what impact it will have on unorganized labor for certain sectors.
But I don’t think it really affects that many companies in the S&P or even the Russell 2000.
It’s just more of a political issue than it is anything else.
And if the government becomes more efficient through DOGE, then that’s kind of a good thing.
But the market’s already discounting a lot of these kinds of good news.
So, if there is going to be an air pocket or some reaction to a government policy, it’s probably going to be more on the downside than on the upside.”
The US dollar is nearly at parity with Euro, Dr. Mehra has strong recommendations based on that.
“I think European markets are really cheap.
They haven’t done well in several years.
I mean, international markets are only up about 3%, 4% this year.
The S&P is up about 25%.
I don’t think most people realize that.
If the new administration tries to weaken the dollar in some way, then that could be very bullish for returns for international markets.
I think Japan still looks very good.
The emerging markets, I’m not too sure about.
Emerging markets are really again dependent on what the U.S. dollar does, but the developed overseas markets I think look good.”
Dr. Ajay Mehra has some alcohol beverage stocks in his near term buy lists.
“I think the beverage stocks, Diageo (NYSE:DEO), Pernod Ricard (OTCMKTS:PDRDF), even the beer stocks, Anheuser-Busch (NYSE: BUD), look good.
I think some of the health care stocks which have not worked this year, the pharma companies like Roche (OTCMKTS:RHHBY) could work.
In Japan, Olympus (OTCMKTS:OLYMY) is a stock that we like a lot.
Hoya (OTCMKTS:HOCPY) is another one which is very good in Japan.
I think it’s a combination of health care, and a little bit of semiconductors.
So, these are some of the things that we’re focused on.”
The returns from these markets are highly dependent on the US/Euro exchange rate.
“U.S. markets have really worked because the earnings growth has been there here in the U.S. and there’s been tremendous multiple expansion also.
You have to realize half the returns in international markets are basically dollar movement.
If the dollar remains so strong, then the returns expressed in dollars — they pale in comparison to the U.S. market returns.
And that’s why they have been reluctant to invest.
Geographical diversification hasn’t paid off.
In fact, even in the U.S., diversification within the U.S. has not paid off.
The U.S. market is basically led by seven stocks.
They are over 30% of the S&P right now.
The average stock in the S&P is only up like 7%-8% this year. The S&P is up 25%-26%.
So even here a lot of stocks present value.
I think Baxter (NYSE:BAX) looks very good, for example, to us in the health care space.
I think some of the energy names, especially oil service names, have really gotten beaten down.
Now we are value investors so we naturally gravitate to some of the value sectors.
If growth continues to work, then obviously value will underperform, but growth had a big run.
So, we think this may be time for value.”
Dr. Mehra sees US based railroad stocks as a potential beneficiary from Trump Administration policies.
“One beneficiary from onshoring is definitely U.S. railroads which have not done anything this year.
The railroads are challenged because the industrial traffic has been slow from autos and coal.
Year to date the railroads are down.
So, if there’s more onshoring here, there’ll be more stuff to move around.
Stocks like Union Pacific (NYSE:UNP), even CSX (NASDAQ:CSX), Norfolk Southern (NYSE:NSC), which have not worked and are actually down for the year, could do well.
That’s one place where I think stuff is not discounted.”
Get the complete picture from Dr. Ajay Mehra by reading his entire interview, exclusively in the Wall Street Transcript.
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