NEW YORK ( TheStreet) -- With the Spanish economy growing at its fastest clip since 2007, investors should consider buying some stocks that focus on consumers and Spanish banks, according to one market analyst.
Spain reported a 1% gain in GDP for the second quarter, and there's plenty of room for further growth in the economy, said BGC Partner Michael Ingram. But he cautions that the Spanish stock market overall isn't brimming with good buys.
"I have to say overall, even though we have actually had bullish macro news in Spain, the earnings performance thus far in the broader market in Madrid has actually been quite disappointing," said Ingram.
He pointed out that earnings estimates have been cut by about 5% year-to-date for Spanish companies. However, there are pockets of opportunity. Spanish banks look interesting and he prefers financial institutions with a domestic focus, rather than banks with a large international business.
"There is potentially a drag from the Latin American exposure," said Ingram. "Clearly, some economies such as Brazil are struggling, as indeed are wider emerging markets."
Also Thursday, the European Commission reported that Eurozone confidence unexpectedly hit a four-year high. "It does seem that particularly compared to the U.S., the Eurozone consumer is much happier to spend some of the windfall gains from a much lower oil price," said Ingram.
He also said that optimism isn't reflected in markets, many of which are down on the year, because earnings have been a drag. He's hoping that economic growth will boost earnings in the second half of the year. "Margin expansion, rather than top-line growth, is really what we're looking at," said Ingram. "So, we'll be looking at some of industrial sectors, particularly some export-oriented companies."