Neglected European stocks set to soar

Jul 31, 2009

Share with
friends:

Comments (0) Print this article

Contrarians will warm to a sector where there is "an absence of enthusiasm of any kind", says Tim Price of PFP Wealth Management.

Enter Europe: as Barry Norris of Argonaut Capital Partners points out, net flows into European equity funds have been negative for the past two years. Morgan Stanley notes that at a recent conference, just 19% of investors chose Europe as their favourite investment region while 42% plumped for the US.

On top of that, Europe is also trading at close to a 35-year low relative to US equities in terms of a composite valuation measure including the price/book-value ratio and dividend yields. Citigroup says that pan-Europe's price/book is close to mid-1990s levels.

So European stocks, having lagged behind the US since March, may be set to outperform. Short-term risks abound, but as Warren Buffett says, "the time to get interested is when no one else is".

Comments (0)

Share with
friends:

Related articles

Leave a comment

This will be the name displayed with your comment.

This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.

Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.

captcha To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.

By leaving a comment you accept our terms and conditions.


FREE - MoneyWeek's daily investment emailJohn Stepek

Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.

>