Bargain Shopping in Europe

When considering shopping for “cheap” stocks that have emerged post-Brexit, keep in mind that this group of stocks has offered bargains for quite some time. In a recent article for Forbes, John Reese, CEO of Validea, explains that while investing overseas may seem smart due to the current political and economic turmoil, investors may be better served by focusing on company-specific financials and fundamentals.

Here are five European stocks that get high marks according to Validea’s Guru Stock Screener:

  • Deutsche Telekom AG (DTEGY): communication services company that provides information technology and telecommunications services across Europe and mobile activities in the U.S. market. Market cap of $74.2 billion. Robust sales of $77.5 billion and strong PE ratio of 0.36.
  • Daimler AG (DDAIF): automotive engineering company engaged in development, production and distribution of cars, trucks and vans in Germany. Market cap of $63.3 billion. Hefty cash flow per share ($14.13) and strong sales ($166.3 billion) coupled with favorable P/E/G of 0.44 make this stock attractive. Some volatility due to emissions-related inquiries, but a fundamentally appealing stock.
  • Seadrill Partners LLC (SDLP): owns, operates and acquires offshore drilling units. Market cap of $496 billion.  High book-to-market ratio (2.0) and operating cash flow of $859.9 million indicate solid financial footing. Expanding profitability and growth in return-on-assets (2.1%) get high marks.
  • Allianz SE (AZSEY): financial service company operating in field of reinsurance. Market cap of $62.5 billion. Cash flow per share is favorable ($2.06) and yield-adjusted P/E/G is healthy at 0.42. Equity-to-assets, a good measure of financial health in this industry, is strong at 8%.
  • AXA SA (AXAHY): insurance holding company with market cap of $128.9 billion. Robust earnings growth (13.96%) and best-case P/E/G ratio (0.39). Free cash flow-to-price ratio of 35.37% a bonus. Cash flow per share of $3.15 is more than double the market mean. Dividend yield of 6.48% adds interest.


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