France is not showing such positive signs of economic recovery but it does offer a good contrarian play. Plagued by accusations of corporate misconduct, France Telecom, recently renamed Orange (ADR) (NYSE: ORAN), is a risky play but the company has its strengths. Free cash flow was euro 1.1 billion for the first half of the year, easily covering the company's euro 788 million dividend payment of 3.7%. Book value stands at $12.05 per share, so the company's stock offers value. Revenue is struggling to grow but the company's management is being proactive and is looking to cut costs.
Still, the company will only be able to stage a turnaround if the economic situation in Europe improves and a brutal price war is currently underway. That said, Orange has operations throughout Europe, including the UK, and the growth of mobile 4G usage will hold the company together until Europe starts to grow again.
Trading at a discount to book value and with a higher-than-average dividend yield, Orange could be a good risk to take.
Zhu, stop pumping this stock. Investors here are a lot more savvy than the cut and paste you made. They know what the potential is. Just so you know, there is no alleged corporate misconducts by the SR, unless you are referring to previous administration. SR was the CoS in the government to C. Largarde that handled the B. Tapie case. I must say that once Europe stabilizes economically and politically, ORAN will appreciate to a more sensible level.