dollar weakness enhances european equity returns. European bourses have responded with gains of around 8.9% (in U.S. dollar terms) in the S&P Europe 350 index this year through April 17. In fact, the greenback has depreciated 3% vs. the euro and 2.6% vs. the pound sterling year-to-date, the S&P Europe 350’s 8.9% advance in U.S. dollars compares with a 6% local currency gain. While the greenback still accounts for 66% of global foreign reserves, the euro is fast becoming a more competitive reserve alternative with a 25% share. Here are European stocks that trade as ADRs or ADSs on a U.S. exchange, I believe are worth looking after:
BAB One of the largest airlines, British Airways operates out of one of theworld’s busiest airports, Heathrow, as well as nearby Gatwick.I think demand for international long-haul routes will continue to be strong in fiscal2008 aided by the strength of the pound sterling vs. the U.S. dollar,
Sentiment: Buy
EN Enel is Italy’s leading company in the generation, transmission, distribution,and supply of electricity. Note, the company’s solid and above-peer annual dividend yield of 5.1%, as well as its relatively strong balance sheet. Enel’s balance sheet has allowed the company to aggressively expand its operations outside its core market. For example, it recently announced several dealsin Russia.
Sentiment: Buy
