This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

9 Stocks to Buy for a European Recovery

Stocks in this article: IMTHBCDEOBTISNYRENRDSVODNVS

BOSTON ( TheStreet) -- With the prospect of a resolution to the long-running European sovereign debt crisis in the offing, and the continent's market starting to show signs of life, investors could do well buying stocks of some of its healthiest companies.

As for the crisis, there were two big positives on Wednesday, as a German court said the country can ratify the eurozone's new rescue fund, which is seen as a key to a recovery plan, while separately, Spain said it might not need more aid.

That should have investors thinking about the opportunity of a quick recovery for some stocks, even though the region's economies will likely to continue to struggle.

For gun-shy retail investors who missed out on the post-recession market rally, S&P Capital IQ said in a Sept. 12 research note that "lingering European concerns could provide U.S. investors with a second chance for long-term upside as Europe recovers from crisis pricing."

With that in mind, S&P Capital IQ cited three actively managed European-focused mutual funds as quality performers worth considering, including the $1.6 billion Causeway International Value Fund (CIVVX), the $454 million Federated International Leaders Fund (FGFAX) and the $150 million Putnam European Equity Fund (PEUGX).

Causeway International Value Fund, which is top-rated by S&P at five stars, is 72% invested in European developed markets and 26% in Asia developed markets.

It has a return of 17.5% this year, including 14.7% in the past three months. Its 2012 gain puts it in the top 1% of funds in its category, per Morningstar.

The four-star Federated International Leaders Fund has a return of 19.2% this year, including 15% in the past three months. It also has a top 1% performance in 2012 and has outperformed its peer average based on the one-, three-, five- and 10-year periods based on total return.

The Federated fund is 74% invested in European developed markets, 9% in Asia developed, 6% in the U.S., 2% in Latin America, 2% in Canada and 7% elsewhere.

The four star Putnam European Equity Fund has a return of 17.2% this year, including 15.7% in the past three months. Its year-to-date performance puts it in the top 22% of funds in its category.

The fund is 96% invested in Europe, mostly developed markets.

I reviewed those three funds' top stock holdings and summarized them below.

Big multinationals are the top picks of these funds, and their diversity should protect them from any economic shocks at home while offering strong long-term potential.

Here are nine stocks that are the top holdings of three highly-rated, Europe-focused mutual funds, arranged in inverse order of the number of "buy" ratings they have from analysts:

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,719.00 +33.27 0.19%
S&P 500 2,052.75 +4.03 0.20%
NASDAQ 4,701.8670 +26.1550 0.56%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs