{"id":34636,"date":"2012-12-21T10:55:00","date_gmt":"2012-12-21T15:55:00","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=34636"},"modified":"2012-12-21T10:55:00","modified_gmt":"2012-12-21T15:55:00","slug":"ooh-la-la-the-bullish-case-for-french-stocks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/12\/21\/ooh-la-la-the-bullish-case-for-french-stocks\/","title":{"rendered":"Ooh la la! The Bullish Case For French Stocks"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

The country has a socialist president, one of the most overbearing state sectors of any developed country, some of the highest taxes in the world, and its concept of democratic government seems to require frequent rioting in the streets by its citizens.<\/p>\n

Vive la France!<\/p>\n

France is a country that often seems to prosper in spite of itself, but it is also home to some of the world\u2019s finest companies–including oil major Total (NYSE:$<\/span>TOT<\/a>)<\/strong>, fashion and luxury goods powerhouse LVMH (Pink:LVMUY)<\/strong> and pharma giant Sanofi (NYSE: $<\/span>SNY<\/a>) <\/strong>to name a few.\u00a0 Think about it.\u00a0 Only the cr\u00e8me de la cr\u00e8me could survive and thrive in a place as hostile to business as France.<\/p>\n

In the Sizemore Investment Letter<\/a><\/em>, Europe has been one of my favorite hunting grounds for my \u201cemerging markets lite\u201d strategy.\u00a0 Due to the small size of most European domestic markets and due to their old imperial legacies, European firms tend to be more globally focused.\u00a0 This is an investable theme; one of my best trades in 2012 was in the shares of a French logistics company with a large and growing presence in Africa. (Due to its limited trading volume in the United States, I can\u2019t mention it here.)<\/p>\n

I can, however, recommend that investors take a look at the French market as a whole via the iShares \u00a0MSCI France ETF (NYSE:$<\/span>EWQ<\/a>)<\/strong>.<\/p>\n

France is cheap right now, for reasons you might expect.\u00a0 Investors have placed a \u201cEurope discount\u201d on the entire EU as fears linger about its continued viability.\u00a0 The French ETF trades for just 12 times earnings and yields 3.0% in dividends.<\/p>\n

But as the fears of a Eurozone breakup recede with each passing day, I expect investors to warm to French stocks over the course of 2013.<\/p>\n

I also like the fact that EWQ is weighted heavily in industrials and consumer cyclicals (17% and 15% of the portfolio, respectively).\u00a0 This fits a broader theme I\u2019ve been following of allocating to more aggressive sectors (see \u201cWarren Buffett is Rotating into Riskier Sectors<\/a>\u201d).<\/p>\n

Action to take: Buy shares of EWQ at market and plan to hold for 6-12 months.\u00a0 Use a 15% trailing loss.<\/p>\n

Disclosures: Sizemore Capital is long LVMH. \u00a0 This article first appeared on TraderPlanet<\/a>.<\/em><\/p>\n

The post Ooh la la! The Bullish Case For French Stocks<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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