The European Union certainly has its share of headline-grabbing problems: the worst migrant crisis since World War II; terrorist attacks; indebted countries such as Greece; and sluggish growth. But as Warren Buffett once said with characteristic understatement, Europe "is going to be around."

Turn your back on Europe and you're leaving serious money on the table. Several clear signs now point to a European revival in the making -- and we've pinpointed an undervalued German-based "blue-chip" biotech that's one of your best profit-making opportunities right now on the continent. It's among a group of undervalued growth stocks set to soar in the coming year.

Last Friday in a speech to some of Wall Street's biggest players, European Central Bank President Mario Draghi underscored his determination to do whatever it takes to stimulate the eurozone's moribund economy, including an extension of the ECB's current program of buying about 60 billion euros worth of bonds each month until at least March 2017.

The U.S., China and emerging markets tend to hog the financial limelight, but consider the following: The economy of the European Union was generating a nominal gross domestic product of about 14.303 trillion euros a year ($18.451 trillion at the time) as of an International Monetary Fund report in 2014. That would make it the largest national economy in the world if it were treated as a single country.

Based in the EU's economic powerhouse of Germany, drug giant Bayer AG (BAYRY) (BAYN: Frankfurt) is a powerhouse of its own. The company develops, produces and markets more than 5,000 health care, pharmaceutical and agricultural products worldwide.


BAYRY data by YCharts

With a market cap of $106 billion, Bayer has a promising pipeline of current and potential blockbuster products; monetary stimulus should act as a shot of adrenaline for a company that's already positioned for growth.

As a flood of patent expirations con­tinue to shake up the drug industry, the future winners will be those with the strongest drug development pipe­lines and the most innovative treat­ments.

A robust pipeline is vital for pharmaceutical companies, because it can take about 20 years and $1 billion to create a new drug and usher it through the byzantine testing and approval process.

Another hurdle is patent expiration. Drug patents last for 20 years from the date of application; postexpiry treatments must contend with fierce competition from low-priced generic copies.

Biotech companies are known for product innovation, but they're also notorious for showing great promise and then crashing and burning, either because they couldn't get their drugs through the regulatory gauntlet or because they ran out of cash.

The stocks in your growth portfolio's health sleeve should boast consistently substantial research and development investment, a well-developed pipeline of future drugs geared to anticipated medical needs and large market capitalization. These are the "value criteria" that the world's superinvestors apply for market-beating gains.

Bayer is an exemplary case in point. It's a dominant company, situated in Europe's dominant country. Bayer has said it would spend roughly $15.5 billion on R&D from 2014 through 2016, which represents a 16% year-over-year increase over spending levels in 2013. Management also put aside about $10 billion for deal-making over this two-year period.

One of Bayer's most promising new drugs is Eyelea, to prevent eye blindness in the elderly. Eyelea has been approved by U.S. Food and Drug Administration, as well as by regulators in Europe and Japan. As the world's population gets older, demand will soar for eye treatments such as Eyelea.

Eye care is a long-term growth opportunity as aging baby boomers around the world grapple with macular degeneration. Europe's population is quickly graying, but the spread of eye disease is a phenomenon around the world. In America alone, cataracts affect more than 24.4 million people age 40 and older, according to the American Academy of Ophthalmology. By age 75, approximately half of all Americans have cataracts. The Academy also reports that glaucoma affects more than 2.7 million Americans age 40 and older. During the next 15 years in the U.S., the number of cataract patients will increase by 60% and glaucoma patients by 50%.

Bayer and Regeneron Pharmaceuticals are engaged in a joint plan to develop and market Eyelea. Regeneron is a U.S.-based biotechnology company with several new drugs poised for launch; its partnership with Bayer strengthens the global marketing reach of both firms.

Bayer also is a major player in crop science. The company is tapping emerging markets that increasingly seek to boost the yield of their grain crops in order to meet the booming consumption of meat by their rising middle classes. Bayer's diverse portfolio of products makes the company well suited for a long-term growth portfolio that's designed to withstand temporary market gyrations.

Drought-resistance plays a role as well. Investment opportunities are arising among companies that provide solutions to the economic dilemmas created by climate change. As severe weather becomes more frequent, Bayer's high-performing seed varieties help farmers cope with disruptions in growing conditions.

Bayer enjoyed a prosperous 2014, in terms of operational results as well as strategically. The company set new records for revenue and earnings. Bayer's revenue for all of 2014 rose by 5.2% year over year, to 42.2 billion euros. Earnings increased by 7.4% year over year to 3.4 billion euros and earnings per share rose by 7.3% to 6.02 euros.

In the third quarter of fiscal 2015, the company's revenue and earnings grew 7% and 21%, respectively, on a year-over-year basis.

The stock sports a trailing 12-month price-to-earnings ratio of about 26, putting it roughly in line with the average trailing P/E of its industry, but lower than some of its major competitors, such as Allergan at 29.

Bayer's stock is down 6% year to date, which means it's poised to rebound as demand for its biotech and agricultural products increases amid looser monetary conditions in Europe. The stock now trades at about $128, but on average, analysts expect it to rise significantly. The average 12-month price target is $184.

Warren Buffett is betting big on Europe, which means you should, too. To discover exactly what Buffett's Berkshire Hathaway is now buying and selling, download our free report.

John Persinos is an editorial manager and investment analyst at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.