I am looking for some quality businesses to look at in Europe: High ROCE, strong stable cashflows, reasonable growth potential, not sky high valuations. I am typically looking to hold for around 3 yrs minimum and would prefer businesses that I understand (consumer centric rather than say tech hardware), with an emphasis on a large number of relatively small purchases eg charm bracelets (see Pandora below), pizzas etc. If there is a franchise element to the business model then so much the better given these businesses tend to be v high ROCE and v cash generative.

Why Europe? because I feel the US and UK markets look quite expensive. In the UK we could get a minority Government in the next few months or even Labour which has historically been poor for equity market returns. Add in that I think that scenario would be negative for Sterling vs Euro and hopefully you can see my reasoning.

I recently had a look at Pandora (global manufacturer and retailer of affordable charms and rings, listed on Copenhagen SE), after a v difficult 2012 trying to upsell customers it has concentrated on the affordable segment again. V high quality in terms of ROCE (shops are leased, also it franchises some regions), LFLs just roofed it in the UK and Australia, buying back shares etc, good management: Allan Leighton (ex Asda CEO) is just stepping back as CEO into Non Exec Deputy CH. Looks interesting but shares have just jumped 25% and are on 20x PE, so its going on my watch list.

Any ideas really greatfully accepted and if I think its really interesting then I am happy to do some research and write up my findings (see my comment on £DDP.L Charlemagne Capital (LON:CCAP).L or $GENC to get an idea of the stuff I write).

Many thanks

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