Benefiting From Euro Weakness: Exporters for Your Watch List

At the start of the week, the euro enjoyed a brief boost on the official announcement of Ireland's 85 billion euro bailout. But the rally was short-lived, and by Monday's close of trade, the currency had plummeted to a two-month low, weighed down by worry over the sovereign debt crisis.

Fears that Ireland's economic woes are on a collision course headed straight for Spain and Portugal may be coming true, as European bond yields soar -- an indicator of investors' lack of confidence in their government's ability to pay them back. But on the bright side, weak currency can help a country's ailing market by driving export business.

Here's why. A monetary unit from a country with strong currency buys more money in a country with weak currency. Which means that the strong-currency country can purchase exports, priced in cheap cash, at a discount.

Eurozone economies like Germany have been able to profit from the weakening euro currency. Amid the chaos in Ireland and Greece, Germany's robust export business has helped keep the continent's recovery from going off the rails.

But what happens when the euro starts to gain again?

While the U.S. warms up the printing press for a second round of quantitative easing, Europe is taking a different tack, eschewing further stimulus in favor of greater austerity measures. In terms of currency, this most likely means further devaluing of the dollar, which could drive the euro upward.

Suddenly U.S. exports, priced in weak dollars, may be looking a whole lot more appealing to importer nations than European goods priced in strong euros.

If the euro is poised for an about-face, does this mean the tables are about to turn for European exporters? Here's a list of European exporters you may want to keep on your watch list. (Click here to access free, interactive tools to analyze these ideas.)

The list has been sorted by annual performance.

Company

Industry

Country

Annual Performance

Carnival (NYSE: CUK  ) General Entertainment United Kingdom

21.36%

Siemens AG (NYSE: SI  ) Telecom Services Germany

17.36%

Fresenius Medical Care (NYSE: FMS  ) Specialized Health Services Germany

11.08%

SAP (NYSE: SAP  ) Application Software Germany

1.25%

Alcatel-Lucent (NYSE: ALU  ) Communication Equipment France

-17.56%

Nokia (NYSE: NOK  ) Communication Equipment Finland

-25.58%

Interactive Chart: Press Play to compare market cap and analyst ratings for all stocks mentioned above.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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