France’s Recovery: Time to Look at Eurozone Stocks?

France’s Recovery: Time to Look at Eurozone Stocks?

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In an important piece of financial news, the Eurozone posted its first signs of recovery yesterday. Europe's over-all economy grew 0.3% this quarter, despite the continued lag of Southern Europe. Greece, Spain, and Cyprus's economies are all still down – and even economic powerhouse the Netherlands remains mired in recession.

Germany, often called the center of the European economy, added 0.7% to its GDP; beating expectations. But the real surprise was 0.5% growth posted by France, more than double what was anticipated of Europe's second largest economy. The gains made by the both countries, the largest in Europe, were enough to boost growth in the Eurozone as a whole despite the poorer performance of many of the smaller member states. 

Some are arguing that France needs to do a lot more to stay competitive in a global economy. For one, unemployment is still very high there, a thorn in the side of President François Hollande, who has pledged to end a 26-month streak of rising unemployment. The IMF is urging France to stave off its deficit reduction until they can get the number down – and some are even concerned that an unsteady government is trying to over-state the gains it has made. 

However, several signs indicate that the fundamentals of France's economy are turning around. Industrial production is up 1.4%, business confidence hit a 15-month high, and exports are up. All of this on top of a national economy that remains one of the richest in the world, and a capital that holds more corporate headquarters than anywhere except Tokyo.

Whether you're on the lookout for investing ideas in a resurgent Europe – or simply a Francophile - we decided to run a screen on French stocks traded in the US. We limited our universe geographically, and then narrowed the results further to companies that posted positive sales growth throughout the recession. Even if a company was unable to increase earnings or share price, continued sale growth can suggest that a stock is healthy enough to bring in profits despite the state of the economy. 

Is Hollande exagerating the French recovery, or is it for real? Use the interactive charts below to begin your own analysis. 

1. CGG SA (CGG, Earnings, Analysts, Financials): Provides geophysical equipment and geophysical services for the oil and gas exploration and production industry in North America, Central and South Americas, Europe, Africa, the Middle East, and the Asia Pacific. Market cap at $4.26B, most recent closing price at $24.13. Sales growth over the last five years: 7.50%

 

2. EDAP TMS SA (EDAP, Earnings, Analysts, Financials): Engages in the development, production, marketing, distribution, and maintenance of minimally invasive medical devices for the treatment of urological diseases. Market cap at $48.33M, most recent closing price at $2.61. Sales growth over the last five years: 3.20%

 

3. Sanofi (SNY, Earnings, Analysts, Financials): Engages in the discovery, development, and distribution of therapeutic solutions to improve the lives of everyone. Market cap at $137.32B, most recent closing price at $51.79. Sales growth over the last five years: 4.20%

 

4. Sequans Communications S.A. (SQNS, Earnings, Analysts, Financials): Designs, develops, and supplies 4G semiconductor solutions for wireless broadband applications. Market cap at $86.69M, most recent closing price at $1.94. Sales growth over the last five years: 9.80%

 

5. Total SA (TOT, Earnings, Analysts, Financials): Operates as an integrated oil and gas company worldwide. Market cap at $121.98B, most recent closing price at $53.57. Sales growth over the last five years: 5.90%
 

 

(List compiled by James Dennin. Analyst ratings sourced from Zacks Investment Research. All other data sourced from Finviz.)

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