NEW YORK (TheStreet) -- Those who bought European stocks at the height of the eurozone crisis were handsomely rewarded: In 2012, the FTSE Eurofirst 300 returned 15.14%, in 2013 it increased by 12.41%. Even this year it managed a rise of around 5%.
That's despite regular warnings about the collapse of the eurozone, the Germans' reluctance to allow the European Central Bank to print money and frequent scares about the banks -- and even, in 2013, the collapse of Cyprus's entire banking system.
So those who are scared by the various political tensions -- the latest being the snap election in Greece -- and think they would be better off staying away from the old continent in 2015 should consider some factors that are likely to favor eurozone stocks in the year ahead.
The most important is the ECB's long-delayed quantitative easing effort. At the central bank's last meeting in December, President Mario Draghi made it quite clear that quantitative easing will go ahead, whether the Germans like it or not.
Exporters are likely to profit handsomely from this. Analysts at U.K. investment magazine Investors Chronicle say that a rule of thumb in Europe is that, if the euro depreciates by 10% against the U.S. dollar, this translates into a 10% upgrade for European corporate earnings.
German companies are the eurozone's biggest exporters and they have kept Europe's biggest economy going through the crisis. Recently, strategists at HSBC upgraded German stocks to overweight, saying they have been punished unnecessarily by investors scared by the crisis in the rest of the single currency area.
In fact, the strategists at HSBC prefer European stocks to U.S. equities, saying they are deeply undervalued. The trend-adjusted price/earnings ratio -- a seasonally adjusted earnings multiple used by HSBC researchers for valuation that takes into account cyclical factors -- shows that European stocks are trading at a 40% discount to U.S. stocks.
One sector that could be attracting investors' attention in 2015 -- for positive reasons for a change -- is the financial sector. European banks have gone through tremendous trouble since the financial crisis hit, but 2015 looks like the year when they could see a bit of a turnaround.
The ECB took over as the single supervisor of banks in the eurozone in November 2014. Before that it carried out a comprehensive asset quality review as well as stress tests for Europe's biggest banks. The process has eliminated some of the uncertainty that was hanging over the sector, although it has not fully dissipated investors' doubts.
Regulatory pressures seem to be easing as well as the Basel III regulations are almost fully introduced in European legislation -- although litigation risks remain a big unknown for the sector, and various strategists advise avoiding European banks with exposure to Ukraine and Russia.
Finally, an important consideration for investors looking at the eurozone is the fact that the fall in the price of oil has not been fully priced into equities in Europe.
Because so many oil companies are part of the indexes, the negative impact has been felt immediately by the stock markets. But a lower oil price acts like a stimulus for most European countries, and this is yet another positive for stocks that needs to be taken into account.
Risks are still high for the eurozone, especially on the political and geopolitical front. But the tailwinds are definitely getting stronger.