NEW YORK (TheStreet) -- Not even a year ago, Carl Weinberg, the founder and chief economist of High Frequency Economics, declared in an interview with Barron's that Europe was in a depression. But, as detailed in a recent article in TheStreet, current manufacturing data show that the continent is recovering. Investors could profit from the rebound via stocks headquartered in Europe, such as Royal Dutch Shell (RDS.A), Unilever (UL) and Siemens (SI), among many others.
In particular, the energy sector for Europe is very promising.
The continent is starting to move toward allowing fracking for oil and natural gas. Spain just revised laws to permit fracking. And Britain and Poland already allow fracking. That is bullish for Repsol (PINK:REPPY), the major oil company that is based in Spain. It is also good news for Royal Dutch Shell, the second largest oil and natural gas entity in the world and the biggest in Europe. Small-cap firms such as Octagon 88 (OTC:OCTX), headquartered in Switzerland, will also benefit. Europe is the second largest market for natural gas in the world. The more energy it produces and the less it imports, the more job-creating capital stays at home, and the better its balance-of-payments position becomes.
Companies in the consumer sector will also gain.Britain's Unilever and Switzerland's Nestle (OTC:NSRGY) are two of the biggest and best consumer corporations to be found. Many of their brands are easily recognizable. Nestle's chocolate speaks for itself. Unilever's many popular products include Dove, Lipton and Vaseline. Unilever even owns the counterculture pride of Vermont, Ben & Jerry's (I guess we all sell out to The Man eventually). Both of these blue chips are not only strong in Europe, but also around the world. Major German exporters such as Siemens, Volkswagen (OTC:VLKAY) and BASF (PINK:BASFY) all benefit from the weak Euro. If Germany were not a member of the Eurozone and had its own monetary unit, its exports would be much more expensive. The motor vehicles from Volkswagen, the chemical products from BASF, and the equipment and technology from Siemens would all cost more if priced in a currency with its value based on the economic puissance of Germany, a major export nation. Instead the German currency is the weak euro. With the improving economies of local countries, there will be more opportunities for German companies within the Eurozone, removing the currency risk. The European Union was the globe's largest exporter by value in 2011, according to the CIA Factbook. Even after being in a "depression" in the view of some experts less than a year ago, the European Commission reports that it is still the top exporter of manufactured goods and services. The improving economies in Europe will create opportunities for growth for these firms at home, especially in the energy sector. From blue chips like Unilever to small-caps like Octagon 88, there are many stocks in Europe that should rise along with the economic growth of the region. At the time of publication, the author held no positions in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts