I've just returned from the World Money Show, where some 10,000+ investors gathered to learn about global investing. I had a chance to meet with many of the advisors who were featured at the show, and I have been highlighting some of their favorite investment ideas. To view all of the stocks featured in this special global report, click here.
"Germany is the third largest economy in the world, and it's leading index -- the DAX 30 -- has been in a bull market for four years," notes Heiko Böhmer.
The editor of Privat-Finanzletter offers a trio of German stocks -- on sports cars, solar cells, and Internet broadband growth -- as well as an ETF play for U.S. investors seeking an easy way to participate in the German market.
He explains, "Changes are occurring, as Angela Merkel has become the first female chancellor in Germany and the first chancellor from the former GDR. Meanwhile, we are seeing an ongoing consumer record, health care reform, corporate tax reform, and a recovering construction sector.
"Earnings growth for 2006 was estimated at 21%. I would caution, however, that earnings could slow this year and, after a four-year bull market, there is a chance for an overall market correction -- perhaps as much as 15%.
"Meanwhile, Germany is the biggest export nation in the world and is known for brands that are recognized worldwide. For example, Porsche (Other OTC:PSEPF) is the most profitable car producer. Earnings grew 78% from 2005 to 2006. The U.S. is a very important market.
"Meanwhile, its stake in Volkswagen could grow later this year. Currently, VW's earnings are the biggest driver for Porsche shares right now. Longer term, Porsche will be selling more higher margin cars such as the 911 Turbo. And, its Panamera will be launched in 2009-2010.
"Q-Cells (Other OTC:QCLSF) is a pure solar play from Germany. It is the number one independent cell producer. The company has a two-step strategy: growth and cost reduction. Q-Cells nearly 'sold out' as 2006 revenues rose 53% while earnings were up 102%. For 2007, growth is forecast at 30%.
"United Internet (Other OTC:UDIRF) is the market leader in the German and United Kingdom internet hosting market. It is the #2 internet service provider in Germany, with more than 6 million customers, which is a 16% market share.
"The company also has a strong position in the online marketing area. We look for the company to expand, and the driver for the share price will be the development of the broadband market. In fact, Germany current has the lowest broadband penetration rates in Europe.
"Meanwhile, earnings growth in 2006 was 85%. Earnings growth for 2007 is estimated at 41%. I believe the stock is undervalued and offers 30% upside potential.
"For investors who are not comfortable buying shares that are not available on the major U.S. exchanges, I would suggest looking at iShares MSCI Germany index fund (AMEX:EWG), which is an exchange-traded fund. Indeed, this is an easy for U.S. investors to participate in Germany. It holds 54 different stocks and has shown strong outperformance relative to U.S. indices."
Steven Halpern's TheStockAdvisors.com provides a free, daily overview of the latest stock ideas from the nation's leading financial newsletters.
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