Tags: Nestle | Novartis | Bargains | Euro

MarketWatch: Nestle, Novartis Are Bargains in Euro Crisis

By Michael Kling   |   Tuesday, 13 Dec 2011 01:14 PM

While most investors are biting their nails over the eurozone's potential unraveling and a worldwide recession, contrarian investors are seeing opportunity in Europe.

The legendary Baron Rothschild, a great contrarian investor, reputedly recommended buying only when there was blood on the streets. There's not yet blood in Paris, but Greece has seen some rioting and bloodshed, and most observers believe the eurozone's troubles are far from over.

Financial adviser Kurt Brouwer, writing for MarketWatch, advises that this is indeed a good time buy certain European stocks. Brouwer recommends large European companies that do business outside Europe.

For instance, Nestle S.A. operates around the world. Around for 140 years, it has shown that it can survive tough times.

Novartis, a pharmaceutical firm, is another global company. It was formed when two large companies, Ciba-Geigy and Sandoz, merged in 1996. Their forerunners can be traced back to as early as 1758.

Royal Dutch Shell, the giant oil company, operates in 90 countries, and its predecessor originated in the 1800s.

Buying a mutual fund or ETF is the best way to get a piece of these kinds of companies, says Brouwer, noting that he's not recommending purchasing those individual stocks.

Brouwer himself owns Harbor International, a large cap value-oriented mutual fund with almost 70 holdings and about 70 percent of its assets in European stocks.

Vanguard European ETF, which tracks the MSCI European Stock Index, has a diverse group of almost 500 European stocks, he notes.

These funds have not done well recently, he admits. But that is the point of contrarian investing.

Financial analyst Tom Konrad agrees that European stocks offer opportunities for contrarian investors.

He recommends alternative energy companies, such as environmental services firm Veolia, Germany's SMA Solar, the Danish insulation manufacturer, Rockwool, and Dutch bicycle and e-bike maker, Accell.

"Europe, with its high energy prices and early acceptance of the science of climate change has for many years been growing industries with the technology and skills to confront peak oil and climate change," he writes for the website, alternativeenergystocks.com.

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