For Risk-Takers, Stock Plays in the U.S. and Europe

Imagine if you had played the contrarian and picked up blue chips in the Crash of 1987, or Amazon.com and Apple during the tech collapse of 10 years ago, or a barrel of oil at $10 when Russia defaulted in 1998. You probably imagine it all the time.

Those bets paid off big, and with such scores in mind, investors watching Europe wrestle with its financial crisis might be tempted to hunt for bargains there. “The performance of European equities is being driven by headlines and sentiment,” says Patricia Oey, an analyst with fund research company Morningstar, rather than any sober evaluation of company fundamentals. Sarah Ketterer, chief executive officer of Causeway Capital Management in Los Angeles, is finding values in Europe among high-dividend-yielding multinationals. She likes Siemens of Germany and Spanish power plant and airport builder Técnicas Reunidas because they derive a large share of their revenue from faster-growing emerging markets and have healthy balance sheets. “Financial strength has become especially important in Europe as bank credit will become increasingly difficult to obtain,” she says.