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European Debt Crisis: End of an Era?

By: Kapitall
Posted: 8/1/2011 8:48:00 PM
Referenced Stocks: AIB;AIXG;ALU;ASMI;DAC;NM;NXPI;STM;VE;VPRT

(List compiled by Andrew Dominguez. Data sourced from Finviz.)

Europe finds itself in the “worst of all worlds,” writes Ambrose Evans-Pritchard of The Telegraph. Unlike the US, where a political battle over the debt ceiling is merely a distraction from positive economic indicators, Europe is mired in a complex economic predicament that will almost certainly result in “the first sovereign default in Western Europe since the Second World War”.

Evans-Pritchard argues that the EU’s latest attempt at a Greek bailout is a case of too-little-too-late, and will likely spread, in some undesirable form, to Spanish and Italian financial markets. 

And it seems that one possible remedy for the situation – using the European Financial Stability Facility (EFSF) bailout fund as a market guarantor/lender-of-last-resort – is largely unachievable because European legislators have gone on holiday.

He believes that the ongoing debacle stems both from the ineptitude of certain EU governments and “German, Dutch and Finnish unwillingness to face up to the implications of [the Economic and Monetary Union].” 

In other words, a possible collapse of the Euro common currency could probably be staved off if Germany and other well-off Eurozone nations chose to support it. Unfortunately, they seem unsympathetic to the troubles of their Southern neighbors. 

Evans-Pritchard is concerned that the events in 1931 leading up to the Great Depression could be repeating themselves. However, he believes that the US, with the help the Fed’s foresight, could possibly withstand a European meltdown despite its own debt troubles. 

Still, he warns: “If both [Europe and the US] go down together, buy a shotgun and prepare for 1932.”

Are you concerned about the health of Europe and European companies? To help you come up with your own ideal investing strategy, here is a list of European companies that have been battered in the stock market over the past month. Do you think these stocks should be avoided? Or do you think investors are undervaluing them?

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List sorted by share price performance over the past month.

1. Vistaprint N.V. (VPRT): Business Services industry with a market cap of $1.15B. Share prices have fallen by 43.11% over the past month. It is an online provider of coordinated portfolios of customized marketing products and services to micro businesses worldwide. It offers a range of products and services ranging from printed business cards, brochures and post cards to apparel, invitations and announcements, holiday cards, calendars, creative design services, copywriting services, direct mail services, promotional gifts, signage, Website design and hosting services and e-mail marketing services. Its Internet-based order processing systems receive and store tens of thousands of individual orders on a daily basis and, using algorithms, organize these orders for production and delivery to its customers.

2. Alcatel-Lucent (ALU): Communication Equipment industry with a market cap of $9.4B. Share prices have fallen by 29.69% over the past month. It is engaged in mobile, fixed, Internet Protocol (IP) and Optics technologies, applications and services. It is a partner of service providers, enterprises, industries and governments worldwide. It operates in three business segments: networks, applications, and services.

3. ASM International NV (ASMI): Semiconductor Equipment & Materials industry with a market cap of $1.54B. Share prices have fallen by 26.62% over the past month. It designs, manufactures and sells equipment and services to its customers for the production of semiconductor devices, or integrated circuits. It is engaged in the wafer processing and assembly and packaging market segments. The wafer processing production systems perform processes on round slices of silicon, called wafers, which are 200 millimeters or 300 millimeters in diameter. Assembly and packaging production systems then assemble and connect one or more known good dies in a single package, to form a semiconductor device that will perform calculations, store data and interface with its environment.

4. NXP Semiconductors NV (NXPI): Broad Line Semiconductor industry with a market cap of $4.96B. Share prices have fallen by 21.85% over the past month. It provides High-Performance Mixed-Signal and Standard Products solutions. NXP’s product solutions are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. It is engaged with original equipment manufacturers worldwide and over 58% of its sales are derived from Asia Pacific (excluding Japan).

5. Allied Irish Banks plc (AIB): Foreign Money Center Banks industry with a market cap of $2.11B. Share prices have fallen by 21.82% over the past month. It conducts retail and commercial banking business in Ireland. It also provides corporate lending and capital markets activities from its head office at Bankcentre and from Dublin’s International Financial Services Centre. It also has overseas branches in the United States, Germany, France and Australia, among other locations.

6. Aixtron SE (AIXG): Diversified Machinery industry with a market cap of $2.73B. Share prices have fallen by 21.17% over the past month. It is a provider of deposition equipment to the semiconductor and compound-semiconductor industry. Its technology solutions are used by a diverse range of customers worldwide to build advanced components for electronic and opto-electronic applications based on compound, silicon, or organic semiconductor materials. Such components are used in fiber optic communication systems, wireless and mobile telephony applications, optical and electronic storage devices, computing, signaling and lighting, displays, as well as a range of other technologies.

7. Danaos Corporation (DAC): Shipping industry with a market cap of $482.87M. Share prices have fallen by 20.89% over the past month. It is an international owner of containerships. It is engaged in acquisition and operation of vessels. As of May 31, 2010, the Company had a fleet of 45 containerships aggregating 193,629 twenty foot equivalent units (TEUs). As of May 31, 2010, these customers included China Shipping, CMA-CGM, Hanjin, Hyundai, Maersk, MISC, United Arab Shipping Company (UASC), Wan Hai, The Containership Company (TCC), Yang Ming and ZIM Israel Integrated Shipping Services.

8. STMicroelectronics NV (STM): Broad Line Semiconductor industry with a market cap of $7.2B. Share prices have fallen by 18.87% over the past month. It designs, develops, manufactures and markets a range of semiconductor products used in a variety of microelectronic applications, including automotive products, computer peripherals, telecommunications systems, consumer products, industrial automation and control systems. Its products include discretes, microcontrollers, Smartcard products, standard commodity components, micro-electro-mechanical systems (MEMS) and advanced analog products, application-specific standard products (ASICs) and application-specific standard products (ASSPs) for analog, digital, and mixed-signal applications.

9. Veolia Environnement S.A. (VE): Waste Management industry with a market cap of $11.63B. Share prices have fallen by 18.61% over the past month. It is a provider of environmental management services, which include water and wastewater services, environmental services, energy services (excluding the production, trading and sale of electricity, other than production through co-generation) and transportation services. Its clients include a range of public authorities, industrial and commercial services customers, and individuals worldwide. It provides drinking water to more than 80.4 million people and treats wastewater for 58.5 million people in the world, processes nearly 68 million tons of waste.

10. Navios Maritime Holdings Inc. (NM): Shipping industry with a market cap of $437.72M. Share prices have fallen by 15.98% over the past month. It is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of dry bulk commodities, including iron ore, coal and grain. It has two business segments: Vessel Operations and Logistics Business.