It's hard to avoid the seemingly endless stories of doom and gloom coming out of Europe. Every piece of good news seems to have less and less impact, and most would have you believe that the EU is hurtling towards the cliff. It's no wonder then, that investors have stayed away from European exposure like the plague. But Scott Bleier of Create Capital says it's time to ignore all that talk and examine at least a few European stocks that are poised to surprise.
"Europe is imploding," Bleier says, "the banking system is imploding, most people don't know about it, don't want to know about it; they'd rather watch soccer and enjoy their summer…but many of the great European companies are now trading on valuations and price levels of that of 2008 / 2009 lows."
Bleier isn't suggesting you go on a European stock shopping spree but points to some companies "in a couple of industries that I think are very interesting and that should be bought now for intermediate term gains." The prevailing themes for each are good yield, good value and a worldwide footprint.
Without further ado three of Bleier's picks:
Bleier admits the British pharmaceutical with a $58B market cap isn't the worlds best drug maker but contends with the stock trading at 6 times earnings and producing a yield north of 6%, the company is a buy. As for a drug pipeline that isn't quite up to par with some competitors, Bleier says fear not; the aforementioned "trading at 6 times earnings" makes pipeline concerns all but irrelevant in the hear and now.
ABB Ltd (ABB)
This Swiss energy company is what Bleier calls "the G.E. of Europe." He cites strong management and a yield of over 4% as primary reasons to take a look at the company. Concerned that now isn't the time to invest in any company that puts "Europe" and "industrial" in the same sentence? Bleier argues ABB is a truly multinational company and offers projects in China, South America and Africa as reasons to stay optimistic. "I don't want the favorite," he says, "I want the one that's been abandoned and is still running well and ABB is one of those stocks."
TOTAL SA (TOT)
This French oil company has a healthy yield and a huge footprint across 130 countries says Bleier. He points out that the stock sells at a 35% discount to energy Goliath, Exxon Mobil, but maintains a footprint just as big. He adds that if the world economy picks up even just a little, energy companies like Total stand ready to "take off."
What do you think? Has Bleier made you a believer that Europe isn't just a wasteland where once great companies have gone to die? Will you take any chances across the pond? Let us know on our Facebook page.
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