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Europe may not be out of the woods yet. Its economic and political crisis may not be over for years to come. But things seem to have stabilized lately, and European markets are on a rebound, especially as the Greek debt crisis is easing. This means that Europe could bring hefty gains for daring investors, given the low valuations of European equities. According to a Barron's cover story this weekend, the Stoxx Europe 600 Index trades for 11.5 times 2013 estimated earning, compared to 12.5 of S&P 500. Valuations are particularly low for countries with acute sovereign problems like Greece, Ireland and Spain.

Here are three trades investors may want to consider:

1. A High Risk Strategy. Buy Governor and Company of the Bank of Ireland (NYSE:IRE), one of Ireland's largest banks to benefit from a comeback of the Irish economy. Portugal Telecom (NYSE:PT), paying 7.40 percent dividend. Also, National Bank of Greece (NYSE:NBG), the largest bank of Greece with an extensive presence in the Balkan region, Turkey, and Egypt-though investors may want to wait until the bank is re-capitalized.

2. Moderate Risk Strategy. Buy European assets, either directly or through ETFs like iShares Spain (NYSEARCA:EWP), iShares Germany (NYSEARCA:EWG), iShares Italy (NYSEARCA:EWI), iShares Greece (NYSEARCA:GREK), and Currency shares Euro (NYSEARCA:FXE).

3. A Low risk strategy. Buy French, Spanish and Italian companies that trade in NYSE like British Diageo (NYSE:DEO), paying 2.90 percent dividend, French oil and gas giant Total (NYSE:TOT), which pays 5.20 percent dividend, Italian energy company Eni (NYSE:E), which pay 4.60 percent dividend, and British telecom giant Vodafone (NASDAQ:VOD), paying 3.9 percent dividend.











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Investors may also want to consider the shares of Greek companies trading in U.S. exchanges - larger companies with a dominant position in world industry leaders like Greek shipping companies:

Tsakos Navigation (NYSE:TNP): A large oil tanker owner and operator with a world-class management team, Tsakos is a value play. The company has $164 million in cash and pays a 5.20% dividend, and could be a big beneficiary of the rebound in European and world economies.

Diana Shipping (NYSE:DSX): A leader in dry bulk shipping with a PE of 8.69, an operating profit margin of near 50, and $373 million in cash, and a major beneficiary of a revival of Chinese manufacturing.

Navios Maritime Partners (NYSE:NMM): A diverse shipping company with a PE of 9.92, a profit margin of 41%, and a dividend of 13.70%, not bad for a low interest environment.


Tsakos Navigation

Diana Shipping

Navios Maritime





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A few words of caution: European stocks have already been on a rebound, gaining 15 percent this year. This means that markets may have already discounted the easing of sovereign debt crisis. In addition, investors should be careful in using valuation metrics like PEs in an ultra-low environment; they may not necessary be a bullish sign for equities.

Disclosure: I am long NBG, TNP, NMM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.