While many investors are fleeing the continent, some top fund managers are finding value in Europe.

At the 2012 Morningstar Investment Conference, Longleaf Partners’ O. Mason Hawkins said that P/E ratios in Europe seem very low, particularly when the low-interest-rate environment is factored in, according to Morningstar. FPA’s Steven Romick, meanwhile, says it seems investors are assuming that Europe will never rebound and are ignoring the earnings power of many European firms.

Hawkins and Romick also both discuss why they think record-high profit margins won’t revert all the way back to the mean, thanks to structural changes in the business world. Hawkins also says that he thinks that a stronger economy will help keep earnings strong when margins do erode. He and Romick disagree on interest rates and the damage they pose to equity markets, however. Hawkins thinks rates won’t be increased until the economy strengthens significantly, and that that economic improvement will lessen the impact of rising rates. Romick, however, thinks the Federal Reserve could raise rates without economic improvement, if Treasury investors begin to sour on low rates and take their money to other investments.