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  • Stock Market Watch Starting May 15: European Stocks Worth Watching As Europe Melts  0 comments
    May 15, 2012 11:09 AM | about stocks: BBVA, SAN, BUD, DEO, UL, UNBY, CEDC, IRE, NBG, DB, SAPEGY, AIXG, FMS, PT, TEF, TI, ORAN

    The stock market has been falling once again in part due to Europe having another annual spring meltdown but how can investors and traders alike who have big stomachs for risk profit from Déjà vu? Given that European ETFs or funds are probably too risky as they inevitably have both good and bad stocks, here are a few European ADRs that trade on US exchanges and can easily be bought by US based traders or investors:

    • Spanish banking stocks Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) and Banco Santander SA (STD) have global operations and are some of the biggest financial services players in the world while lightly traded Bankinter SA (OTCPK:BKNIY) is a pure Spanish banking play that trades on the OTC.
    • European beverage behemoths include brewer Anheuser-Busch InBev NV (NYSE:BUD) which (despite the first part of its name) is headquartered in Belgium, Dutch brewer Heineken N.V. (HINKY) which trades on the OTC and diversified UK based alcoholic beverage maker Diageo plc (NYSE:DEO). All have global operations to help offset any poor European sales.
    • London based Unilever plc (NYSE:UL) and Netherlands based Unilever N.V. (NYSE:UN) are essentially the same global FMCG giant offering a nearly 4% dividend yield and a stock price that has remained fairly steady for the past few years.
    • Greece based Coca-Cola HBC SA (CCH) is one of the largest bottlers and vendors of Coca-Cola Company's (NYSE:KO) products in the world and its the largest based in Europe serving approximately 570 million people in 28 countries. However, revenues and volumes have been basically flat.
    • Central European Distribution (NASDAQ:CEDC) is one of the world's largest vodka producers and maintains leading positions in key European markets of Poland, Russia and Hungary. First quarter net income surged on foreign exchange gains but the company also has to deal with 2013 Convertible Notes and management challenges in Russia.
    • Irish banking stocks Bank of Ireland (NYSE:IRE) and Allied Irish Banks (OTCQB:AIBYY) are probably still risky bets but they probably won't fold either. Nevertheless, investors will be waiting a long time for any of them to turn a profit but their stock prices could eventually rise - like Bank of America (NYSE:BAC) and other American banking stocks did after hitting penny stock levels during the depths of the financial crisis.
    • National Bank of Greece (NYSE:NBG) is Greece's largest bank but according to Yahoo! Finance, it has a book value of negative $3.33 - which is not particularly reassuring.
    • The German economy continues to grow on the back of exports and help the entire Eurozone avoid recession but seven EU countries (Ireland, Greece, Spain, Italy, Cyprus, the Netherlands, Portugal and Slovenia) out of 17 are already in recession. Deutsche Bank AG (NYSE:DB), SAP AG (NYSE:SAP), Siemens AG (SI), Aixtron SE (NASDAQ:AIXG) and Fresenius Medica (NYSE:FMS) are among the few German ADRs that can be bought on major US stock exchanges.
    • Europeans will still make telephone calls and surf the Internet but whether or not they will be able to pay their phone or Internet bills is an open question. Either way, Portugal Telecom (NYSE:PT), Telefonica SA (NYSE:TEF) in Spain, Telecom Italia (NYSE:TI) and France Telecom (FTE) could be good and relatively safe bets - unless the continent goes back to the dark ages.

    For a trader or investor with a high tolerance for risks, plenty of trading or investing strategies could be created from the above list of European ADRs - many of which are already heavily discounted. Otherwise and if you believe its still too early to play vulture, it might be a good idea to add a few of the above stock to your My Portfolio list in order to keep an eye on them for when or if Europe gets its act together.


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