Unfair: Greece Got Theirs, Where's Mine?

By Kyle Metivier - February 13, 2012 | Tickers: ANSS, BDX, BIIB, QGEN | 0 Comments

• Email
• Print

Greece is saved, right? Let’s go start a fire to show our disapproval. If you think Greece is truly saved, you might want to pay closer attention.

I was never one of those kids that liked to play with matches, setting everything ablaze from an old, abandoned barn, to my cousin that wouldn’t stop biting me. So if you happen to be somewhat like myself in that regard, recent news that austerity measures have been agreed upon by the Greek parliament should do absolutely nothing in the slightest to put your European fears at ease. This is only going to continue, I fear, and not only because I have seen far too many highly educated Greeks spew anti-German sentiment. And not because any piece of news about that part of the map will ultimately follow with someone annoyingly pronouncing America with an “r” at the end of it; just keep a watchful eye on February 27^th when the German Bundestag holds a special session on the second Greek bailout.

Even if you haven’t watched the spectacular movie, “Snatch”, I am sure you are aware of the saying, “greedy as a pig”. And now that one of these PIGS (Portugal, Italy, Greece and Spain), has agreed on a spot in the “zero growth zone”, any future negative economic developments with the other nations may be dealt with in similar fashion.

You remember as a kid growing up, people always telling you that life isn’t fair. Well, it’s not. Unless you happen to be a member of Walden Pond, and even then it’s shaky, at best. But in Europe, there will probably be a certain amount of “fairness” that some will look forward to, even if their past practices warrant no amount of such consideration. So be sure and look forward to “Too Big to Fail, Part 2 – the European Mess”, coming soon to a newsstand near you. 

I want everyone to focus one of your sharpest eyes on the holdings you have with any sort of interest in the wonderfully happy region of Europe. This story is going to keep repeating itself like those horrible nightmares involving spiders or falling from a cliff. Lather, rinse, repeat, Italy. Ditto, Portugal and we may as well go ahead and throw Spain on the pile while we’re at it.

If you have stocks with European exposure, and if those stocks offer no sort of dividend, whatsoever, I want you to be careful moving forward. Most of these names will enjoy a brief, positive move with the news of Greek austerity measures, but future moves could take a turn for the worse with any negative press from the region. Companies like Qiagen N.V. (NASDAQ: QGEN), which provides sample and analysis products such as prep and test kits for medical research, has 37% of their total revenue ($1.17B), from Europe (they report earnings late April). Ansys, Inc. (NASDAQ: ANSS), which develops and markets engineering simulation technology, has 34% of total revenue ($660M), from the region (they report Feb. 23^rd). And Biogen Idec, Inc. (NASDAQ: BIIB), a biotechnology firm, also generates 34% of their total revenue ($5B), from Europe. These companies, with over one-third of total revenues derived from Europe, deserve a little extra homework if they are part of your portfolio. All were positive after the announcement of the austerity stranglehold looming for Greece. All were recently given neutral ratings by J.P. Morgan.

I am not suggesting that anyone run out and set fire to these stocks. But in times of “market turmoil”, and for the potential of more European malaise, you could do a lot worse than hanging tight to the likes of Becton, Dickinson and Company (NYSE: BDX), which develops and sells medical devices, and has 32% of total revenue (almost $8B), from Europe, but offers a 2.4% dividend yield. So if the going gets rough, and volatility isn’t your cup of tea, look to the strength of a dividend for your holdings with substantial European revenues, and scooping up more shares with reinvested dividends when bad news brings the stock price down.

• Email
• Print
• Feedback