Shares of Siemens (SIEGY) dropped over 14% in 2015, but a recent Street-beating earnings report has given the German turbine-maker's stock a jolt. Kevin Kelly, managing partner at Recon Capital, said the positive energy driving the stock will continue.
"What Siemens demonstrated is that they are doing well in this current market environment both on the top and bottom lines," said Kelly. "And they are providing tremendous value, especially when you compare it to GE (GE - Get Report) ."
Siemens profit soared to €1.56 billion ($1.71 billion) in the company's fiscal first quarter, from €1.10 billion in 2014. The profit figure beat the Wall Street consensus estimate of €1.05 billion.
Kelly is also bullish on German drug-maker Bayer (BAYRY) , which has seen its shares fall over 24% in the last 12 months. Bayer has spent a great deal on cancer drug research, and Kelly expects that R&D to begin paying off in 2016.
"They have great generics -- think of aspirin -- but they also have tremendous drugs that are helping people fight diseases," said Kelly. "And their move into cancer drugs will soon be paying big dividends."
Diageo (DEO) , down 6.6% over the past year, is another one of Kelly's favorite European names. He said the liquor giant will overcome the drop in high-end alcohol sales in Asia, as well as the move toward craft beverages in the U.S.
"They are repricing a lot of their Scotch and whiskeys to compete better in the United States, and over in Asia you are seeing a lift on the sanctions that hampered some of their growth, so they can turn it around this year," said Kelly.
Finally, Kelly is a fan of Arm Holdings (ARMH) , which has seen its stock fall almost 14% in the past year. He said the microprocessor designer has tremendous operating margins and a strong client base.
"They are trading below their historical five-year multiple, so as the space starts to develop you can do very well with this name. And they do pay a dividend," said Kelly.