Thanks to positive fundamentals such as the signing of a “phase one” trade deal between the U.S. and China, our domestic equities sector suddenly looks hot again. More importantly, the optimism is a rebuke toward those who argued that this bull market is overextended. But despite seemingly every reason to go domestic, investors may want to consider buying European stocks instead.
Why go across the Atlantic when our own markets are incredibly robust? For one thing, European stocks are usually undervalued compared to American ones. Of course that doesn’t apply to every name in the region, but with so many catalysts pushing U.S.-based publicly traded companies, investors have simply gone with the momentum, ignoring international plays.
Secondly, European stocks have flown under the radar. As such, not too many folks relatively speaking have considered this sector. Over the intermediate to long-term timeframe, this could be an advantage for European equities. Currently, the U.S. markets feature everyone betting on the same horse, which may limit their upside potential.
Finally — and this may be somewhat controversial — European companies make great products, many better than our own. You see this on the road: I don’t know too many people who, all things being equal, desire an American luxury car over a European one. As you’ll see, this sentiment carries over into other industries.
So, let’s make Europe great again with these seven European stocks to buy!
European Stocks to Buy: Logitech (LOGI)
If you want an example of European ingenuity, look no further than Logitech (NASDAQ:LOGI). Specializing in convenient consumer technology accessories and devices, I’m a huge fan of Logitech’s ergonomic mice — or is that mouses? Either way, Logitech has given me a way around Apple’s (NASDAQ:AAPL) insistence on mice (mouses) that eschew functionality for form.
Of course, I’m not suggesting that you buy LOGI stock based on this ubiquitous, though critical accessory. Rather, it’s the spirit behind Logitech’s mouse innovations that has me interested in its shares.
For instance, the video game industry has evolved from an exclusively-for-nerds subculture to a mainstream phenomenon. And Logitech produces some of the finest gaming controllers and accessories available. I’m especially enthused about its driving simulation hardware, considering how popular this game category is. Thus, keep a close eye on LOGI stock.
NXP Semiconductors (NXPI)
You might as well call 2019 the year of the semiconductor. Multiple names, including Nvidia (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM) and especially Advanced Micro Devices (NASDAQ:AMD) lit up the markets. Among European stocks levered to this vital industry, I can see NXP Semiconductors (NASDAQ:NXPI) stock carrying momentum well into 2020.
What I like about NXPI stock is that the underlying company isn’t just participating for participation’s sake. Rather, they’re laser-focused on how semiconductor technology can positively impact the societies of tomorrow. As a driving enthusiast, I’m intrigued by their next-generation automotive safety features. Plus, NXP is experimenting with autonomous-driving initiatives that could help ease traffic backlogs in major metropolitan areas.
Another reason to consider NXPI stock is NXP’s smart city infrastructure development. This tech has profound implications for counter-terrorism initiatives. And with European stocks especially vulnerable to terror attacks, NXP appears a relevant long-term bet.
Among the European stocks on this list, Airbus (OTCMKTS:EADSY) is personally a troubling one for me. That’s because I like its American rival Boeing (NYSE:BA). In fact, I believe that whatever volatility that the jetliner manufacturer incurs is a long-term contrarian opportunity. Still, you have to like EADSY stock amid Boeing’s many troubles.
Obviously, I’m referring to the embattled Boeing 737 Max jetliner. After two fatal crashes involving the Max, Boeing embarrassingly had to come clean: not only was the Max’s stabilization software prone to malfunction, Boeing didn’t communicate the issue properly.
Now, it’s true that Airbus couldn’t outright take advantage of the tragic situation. After all, passenger jets take time to build so swapping builders isn’t necessarily a practical solution. However, EADSY stock has been trending higher while Boeing shares have been flat to declining.
Moreover, Boeing must expend significant effort to regain public trust. On the other hand, Airbus, which doesn’t have such troubles because their products are arguably better, won’t have to.
Unsurprisingly, most investors refer to Unilever (NYSE:UL) as a boring investment. And you won’t get any argument from me. But what I will say is that UL stock represents a near-perfect example of European stocks to seriously consider.
Despite tremendous enthusiasm in the U.S. equities sector, there are some grumblings about an overdue recession. For the purposes of this article, I won’t dive into this debate. But if a recession or a sizable downturn occurs, UL stock can help mitigate potential volatility.
As a secular retail products specialist — we’re talking food, condiments, personal care and home-cleaning products — Unilever represents the necessities. Even in a market correction, people still have to eat and take care of themselves. Thus, I expect a level of consistency in their revenue stream.
Another factor that should intrigue investors regarding UL stock is how relatively undervalued it is. According to data from StockRover.com, Unilever’s dividend-adjusted trailing-one-year return is 15.6%. In contrast, the S&P 500’s adjusted return over the same period is 27.2%.
In the multiple times I’ve visited France, I can tell you one thing without any hesitation: the French are culinary masters. In my opinion, I don’t think most Americans appreciate the superiority of French culinary expertise because we’re too busy stuffing our faces with ultra-processed junk food. Be that as it may, you should take a long look at Danone (OTCMKTS:DANOY) stock.
Although I just blasted my country’s eating habits, this oft-mentioned insult today takes on a more nuanced tone. Specifically, millennials have different eating and drinking habits than older generations of Americans. Plus, millennials tend to prefer healthy beverages over their sugary, processed counterparts.
I couldn’t think of a better endorsement of DANOY stock. As you know, Danone is one of the leading companies in the healthy beverage space. Danone owns popular and renowned brands such as Evian and Żywiec Zdrój. And with millennials continually affecting how organizations address their needs, Danone is already well-positioned among European stocks.
GW Pharmaceuticals (GWPH)
Ironically, while Canada and the U.S. have made the most noise regarding “botanical legalization,” it’s British biotech firm GW Pharmaceuticals (NASDAQ:GWPH) that’s making the most scientific impact. Plus, GWPH stock isn’t what you would call an expert in the cannabis sector. Rather, they’re a legitimate drug maker exploring alternative ingredients for their therapies.
Typically, such statements about cannabis-related endeavors draw eyerolls, and they should. However, what makes GWPH stock stand out from other European stocks — as well as any other global region — is that the underlying company backs up its hype.
As the developer of the epileptic seizure drug Epidiolex, GW Pharmaceuticals has serious credibility. Currently, it’s the only cannabis-based drug approved by the U.S. Food and Drug Administration. Indeed, the FDA’s website makes it clear that no other CBD drug has received the regulatory agency’s stamp of approval. In my book, this is a huge plus for GWPH stock.
Royal Dutch Shell (RDS.A, RDS.B)
For a brief moment, it appeared that Royal Dutch Shell (NYSE:RDS.A, NYSE:RDS.B) could work its way out of the doldrums. In early January, President Donald Trump ordered an air strike against Iran’s top general, Qasem Soleimani. In retaliation, Iran launched missiles against Iraqi bases housing U.S. service members. Given the implications for a drawn-out conflict, RDS stock seemed like a no-brainer.
However, in a bizarre turn of events that included Iran accidentally downing a Ukrainian airliner, tensions inexplicably eased. Immediately, oil benchmarks gave up their gains and then some, sending individual investments like RDS stock back down.
Still, RDS stock may offer contrarian upside in 2020. For starters, I highly doubt that Iran has satisfied its anger with their missile strikes. The country lost its top general.
Second, alternative energy initiatives are growing but we’re still not ready to replace fossil-fuel based energy sources. That should help keep the lights on at Royal Dutch Shell and others.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.