The green shoots of growth have begun to emerge within Europe over the past 12months.For example, Spanish economic growth is gaining traction, Germany is still growing and 24EU countries have reported a drop in unemployment over the last year.
These figures have prompted the European Central Bank toupgrade its growth forecast for the Eurozone in 2015 to 1.5%, from 1.0%.So the region appears to be turning a corner, and for this reason, Im on the hunt for European bargains.
Industrial sector
One of the best places to look is the European manufacturing sector.With the value of the euro falling, exporters should receive a boost as aweaker domestic currency generally stimulates exports exactly what struggling exporters in the region need. This is one of the side effects of the ECBs quantitative easing program.
And investors dont have to look far to find high-quality European manufacturers. Airbus,Siemens,BASFandBoschare some of Europes top industrial conglomerates, and they are all powering ahead as economic growth takes off.
Property plays
Outside the manufacturing sector, there are also deals to be found in Europes beaten-down property market. Indeed, the European property sector has seen a sharp turnaround over the past few months with asset prices jumping 5% to 20% since the end of last year. During 2014, the value of property transactions jumped by 36% across the region.
Spain in particular has attracted the most attention in the renewed euro area property boom.The Spanish property market has attracted some of the worlds best investors, including Carlos Slim and Microsoft founder Bill Gates.
Gates and Slim hold spots one and two on the list of the worlds wealthiest people so investors should watch where theyre investing closely. Both of these multi-billionaires have invested heavily in Spanish property of the past few years, snapping up builders, Spanish real-estate investment trusts and physical property.
And with property prices across the region rising, interest rates falling and economic growth gaining traction, European property looks to be a great investment.
Bargains to be found
There are plenty of bargains to be found across Europe. According to my figures, in the Eurozonesfour largest economies Spain, Germany, France and Italy out of 863 companies screened, 77 are trading at a forward P/E of less than 15. Ten of these companies support dividends yieldsof 3% or more.
Some of the cheapest plays include banking giantsBNP Paribas,SantanderandSociete Generale. Utility companyEDF also makes the cut and so does luxury fashion designerChristian Dior. Other attractively priced plays include industrial conglomerateSiemens, automotive giantBMWand conglomerateDaimler.
These companies all have market capitalisations of more than 30bn euros so theyre hardly undiscovered gems and growth is likely to be sluggish.
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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
