Italy's a Mess

It's hard to say who's going to end up on top in the snowballing global economic crisis, but one thing's for sure, it's not going to be Italy.

Italy's been seen as the country next in line to Greece to aggravate the European Union's debt burden, right alongside Spain, Portugal, and Ireland. This speculation is well earned ... Italy's debt, which in the ballpark of $2.5 trillion, is nothing to sneeze at.

The problems that led to Italy's current predicament are numerous. Origins range from the more modern economic mistakes such as having few large, publicly owned companies, arduous barriers to entering the workforce, and "little industrial presence in chemicals, pharmaceuticals, computers, and even food processing" to the deeply routed cultural traits that adversely affect the country's growth. This includes the prominence of private, family-owned businesses, an unwillingness to relocate for work, and a tendency to take the summer months off work. Oh, and their population is shrinking.

Now Italy is likely to default and is banning short-selling until the markets calm, a signal that the economy is crashing big time, and they know it.

All eyes are on Germany to save the day. Will they? Is it worth it?

Interested in trading Italian stocks? Below we list the five Italian companies trading on U.S. markets. Do you think these companies will suffer the same fates as their debt ridden homeland, or can they prosper?

Use the list below as a starting-off point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)

1. Eni (NYSE: E  ) : Major Integrated Oil & Gas Industry. Market cap of $68.99B. Current price at $36.13. ENI explores for, produces, refines, transports and markets natural gas, oil and produces chemicals. ENI offers engineering and project management services to the petroleum industry operating in 80 countries. The stock is currently stuck in a downtrend, trading -14.03% below its SMA20, -18.48% below its SMA50, and -20.5% below its SMA200. It's been a rough couple of days for the stock, losing 15.71% over the last week.

2. Gentium (Nasdaq: GENT  ) : Drug Manufacturers Industry. Market cap of $119.91M. Current price at $9.09. Gentium, located in Como, Italy, is a biopharmaceutical company focused on the research, development and manufacture of drugs to treat and prevent a variety of vascular diseases and conditions related to cancer and cancer treatments. This is a risky stock that is significantly more volatile than the overall market (beta = 3.06). It's been a rough couple of days for the stock, losing 13.87% over the last week.

3. Luxottica Group (NYSE: LUX  ) : Specialty Retail, Other Industry. Market cap of $12.61B. Current price at $28.59. Luxottica Group is the world leader in the design, manufacture and marketing of high quality eyeglass frames and sunglasses in the mid and premium priced market segments. The Company's products, which are designed and produced in four facilities based in Northern Italy, include over 1,700 styles available in a wide array of colors and sizes. The stock is currently stuck in a downtrend, trading -6.29% below its SMA20, -7.32% below its SMA50, and -5.43% below its SMA200. It's been a rough couple of days for the stock, losing 9.94% over the last week.

4. Natuzzi (NYSE: NTZ  ) : Home Furnishings & Fixtures Industry. Market cap of $167.29M. Current price at $3.12. Natuzzi Spa, through its subsidiaries, designs, manufactures and markets contemporary leather furniture. The Company markets love-seats, sofas, arm-chairs, sectional furniture and sofa beds in the low to medium price range. Industrie Natuzzi manufactures its furniture in Italy and exports about 97% of it to major retailers and furniture stores in the United States and Europe. The stock is currently stuck in a downtrend, trading -6.49% below its SMA20, -9.69% below its SMA50, and -16.59% below its SMA200. It's been a rough couple of days for the stock, losing 7.01% over the last week.

5. Telecom Italia (NYSE: TI  ) : Diversified Communication Services Industry. Market cap of $22.14B. Current price at $11.99. The Telecom Italia Group is engaged principally in the communication sector that operates mainly in Europe, the Mediterranean Basin and South America. This includes telephone and data services on fixed lines, the development of fiber optic networks for wholesale customers, BroadBand services, Internet services, domestic and international mobile telecommunications (especially in Brazil), and the television sector using both analog and digital terrestrial technology. Might be undervalued at current levels, with a PEG ratio at 0.91, and P/FCF ratio at 6.92. It's been a rough couple of days for the stock, losing 5.32% over the last week.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Becca Lipman does not own any of the shares mentioned above.

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  • Report this Comment On August 14, 2011, at 12:45 PM, thedubliner wrote:

    Good overview of the italian market. I am Italian myself but I prefer to invest in US stocks that also have international exposure (like MCD, HLF, F and many others).

    Italian companies are still too small and linked only to the Italian economic market.

    ciao

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