Why investors should look beyond P/E ratios

European companies trading on high price/earnings ratios amid a cheap market can still deliver strong returns for investors in the coming years, according to Mark Page, co-manager of the Artemis European Opportunities fund.

Page, (pictured), speaking at Investment Week’s Spring Senate Investment Conference in Cape Town, said the eurozone sovereign debt crisis means Europe is trading extremely cheaply but warned investors should not shy away from companies that look expensive by traditional metrics.  “Anheuser-Busch InBev is a large holding in the fund. It is on 16 times earnings but we are not frightened of that. It is very cash generative and has a very high return on equity. That is what you pay for quality and that is how you make a return over five years,” Page said. Page and co-manager Laurent Mille...