Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

Do you think some European stocks are being undervalued by the Euro Crisis? For a closer look at European stocks with strong prospects, we ran a screen.

We began by screening US-traded stocks of companies based in Europe for those that appear undervalued relative to earnings growth, with PEG below 1.

We then screened for those stocks with strong sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables the healthier the company's revenue.

We screened for stocks seeing faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same time period.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall (kapitall.com).

Do you think these companies should be trading higher? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Portugal Telecom SGPS SA (PT): Provides telecommunications services in Portugal, Brazil, and Africa. Market cap at $3.72B, most recent closing price at $4.15. Portugal. PEG at 0.47. Revenue grew by 96.95% during the most recent quarter ($1,715.69M vs. $871.12M y/y). Accounts receivable grew by -48.75% during the same time period ($2,219.04M vs. $4,329.82M y/y). Receivables, as a percentage of current assets, decreased from 46.41% to 32.48% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

2. Chicago Bridge & Iron Company N.V. (CBI): Provides engineering, procurement, and construction (EPC) solutions, as well as process technologies for the energy infrastructure projects. Market cap at $3.44B, most recent closing price at $35.46. Netherlands. PEG at 0.85. Revenue grew by 25.88% during the most recent quarter ($1,201.27M vs. $954.27M y/y). Accounts receivable grew by 14.89% during the same time period ($560.19M vs. $487.59M y/y). Receivables, as a percentage of current assets, decreased from 36.91% to 32.35% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. CNH Global NV (CNH): Distributes a line of agricultural and construction equipment and parts worldwide. Market cap at $8.86B, most recent closing price at $36.98. Netherlands. PEG at 0.64. Revenue grew by 20.01% during the most recent quarter ($4,899M vs. $4,082M y/y). Accounts receivable grew by 6.57% during the same time period ($15,652M vs. $14,687M y/y). Receivables, as a percentage of current assets, decreased from 65.03% to 61.59% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 3 Undervalued European Stocks With Strong Receivable Trends