(Updates to add note on Michelin cost cuts.)NEW YORK ( TheStreet) -- JPMorgan expects European countries to get their house in order, boosting some shares by as much as 84% in the next 12 months. The U.S. investment bank identifies the shares of 30 companies in various industries that are worth buying heading into 2012. Most of the top picks are diversified across countries, though there's a concentration in France and Germany, the most stable in the eurozone.
5. Michelin, the French tire maker, also offers travel assistance via maps and digital navigation systems. Nearly 60% of its sales come from emerging markets and the U.S. Besides the geographic diversification, Matejka says: "We also like tire manufacturers, as the sub-sector benefits from a tighter capacity globally and strong pricing power at the time when raw material price inflation is coming down." The company has also has cut over 1 billion euros in structural costs, which will support higher profit margins. Michelin's stock is down 11% this year. JPMorgan expects the stock to jump 65% over the next 12 months. 4. Safran is a French aerospace company that supplies engines for commercial aircraft to Airbus and Boeing and makes electronic devices. With about two-thirds of the company's order book coming from emerging markets, notably China, the company hasn't felt the full brunt of the European debt crisis. Safran's stock is down 16% this year but is up 62% since the start of 2010. JPMorgan expects the stock to climb 70% in the next year. 3. Arkema, also a French company, is a chemical maker with operations in Europe, North America and Asia. While France faces a potential downgrade of its credit rating, S&P upgraded its outlook on Arkema to "positive" from "stable" last week, with the potential for a one-notch upgrade by the middle of 2012. A strong balance sheet, solid operating income growth, and expansion into fast-growing and more stable markets will support continued growth through 2012. Arkema's stock is up 2% this year and may rise another 76% during the next 12 months, JPMorgan says. 2. ArcelorMittal ( MT) is the largest steel maker in the world, with a market value of $30 billion. The company has been beaten down by not only the European debt crisis, but also by strike threats from labor unions as well as concerns over U.S. defense cuts. Bullish investors point to a steep discount in its shares compared with peers. In addition, ArcelorMittal's book value, at $45 billion, is greater than its market value, indicating the stock has room to run. The stock has a lofty dividend yield of 3.9%. ArrcelorMittal's stock is down 49% so far in 2011, but JPMorgan is predicting an 81% rebound for the next 12 months.
1. Vinci, a French construction and transportation company, maintained record order books in the third quarter. International bookings, up 50%, are more than offsetting zero growth in France. JPMorgan research analyst Elodi Rall likes the stock because of its resilient profit margins, a strong management team, focused M&A activity, the pipeline of projects and limited debt exposure. Vinci's stock is down 18% in 2011, while JPMorgan forecasts it will surge 84% over the next 12 months.
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