4 Non-Bank Investments for Profiting Off a Rebound in Greece

There are other ways for investors to play the Greek recovery.

Mar 3, 2014 at 9:17PM

For contrarian investors, Greece could be one of the best places to invest today. National Bank of Greece (NYSE:NBG) is the most frequently cited way of investing in this country. While the bank does have ties to Greece that stand to create upside if the nation recovers, many investors want to diversify beyond financials and into other parts of the Greek market.

Doing this can be done with a standard investing account if you know where to look. If you're looking to get an even greater selection of investments, consider opening an international trading account (available at many online brokerage firms), but for now, I'll outline four non-bank Greek stocks U.S. investors can use to gain exposure to Greece.

If you're bullish on the Greek recovery but can't decide on a particular company or industry, the Global X FTSE Greece 20 ETF (NYSEMKT:GREK) may the your best choice. The ETF is made up of the largest companies in Greece, giving investors exposure to everything from retail to energy. It should be noted that Greek banks are a part of this ETF but comprise less than 20% of the total holdings.

This ETF also has a total annual operating expense of 0.65%. While I would normally avoid ETFs with anything other that the absolute minimum of operating expenses, this rate of 0.65% seems reasonable considering the ETF gives investors exposure to a foreign asset class that can be difficult for U.S. investors to invest in. If you have a smaller amount of money to invest but are still looking for diversification, the 0.65% expense would quite likely be less costly overall than if you were to buy some of each individual holding, especially considering the higher charges for trades on foreign stocks charged by most brokerage firms.

Metals and mining
Investors interested in a Greek industrial conglomerate may want to consider Mytilineos Holdings. Formed out of a series of mergers in the early 1990s, Mytilineos now has interests in mining, metal production, and energy generation. The company also operates well beyond the borders of Greece through its construction branch, Metka, which has operated projects in Africa, the Middle East, and Asia.

Buying Mytilineos shares is more difficult for U.S.-based investors, but it can be done. The over-the-counter shares listed in the U.S. rarely trade, sometimes with weeks passing between trades. To trade Mytilineos shares, investors will need access to the Athens Stock Exchange. Such access can be found at certain U.S. brokerages (Fidelity is one example) for investors interested in Mytilineos.

Energy giant
If an energy or utility investor is looking for something with more risk and more upside, Public Power Corporation could be an interesting opportunity. The corporation is Greece's largest supplier of electricity, supplying both residential and business customers. Although people still need electricity during recessions, thousands of Greeks are unable to pay for it, resulting in backlogs of unpaid electric bills. A Greek economic recovery could have two major benefits for the corporation, as it would both increase energy consumption and make it easier for customers to pay their bills.

One concern many investors have with Public Power Corporation is the 51% stake owned by the Greek government. This gives the government the ability to use the company as a means of social and economic policy instead of it being managed purely for shareholder returns. There is a privatization plan on the table for the Corporation and, if implemented, it could provide a boost to the stock.

Like Mytilineos Holdings, Public Power Corporation has over the counter U.S. shares that hardly ever trade. But U.S. investors have more options for investing in this company. The corporation's shares are traded with sizable volume in both Germany and Greece. With it being easier for U.S.-based investors to access the German market, most international accounts will allow U.S.-based investors to buy Public Power Corporation shares.

One way to tap into the consumer power of Greece is to invest in the company providing the sugary beverages. Coca-Cola Hellenic (NYSE:CCH) is a bottler and vendor of Coca-Cola in Europe with a strong presence in Eastern Europe and Greece.

While not as targeted of an investment as many other Greek investments, Coca-Cola Hellenic offers a lower risk way of investing in Greece and Europe as a whole. When the situation in Greece deteriorated, the company moved its main listing from Greece and established its headquarters in Switzerland, moving its main exchange listing to the London Stock Exchange. However, U.S.-based investors will find this company one of the easiest Greek investments to trade since it can be brought on the NYSE like other U.S. stocks.

Greece, ex-banks
The most commonly known Greek investment is National Bank of Greece, which offers exposure to the financial side of Greece's economy. But investors in Greece who want to diversify beyond financials should consider DryShips, Mytilineos, Public Power Corporation, and Coca-Cola Hellenic to round out their Greek portfolio.

As the market knows well, Greece is a risky place, so it's better to face this market diversified.

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Alexander MacLennan owns shares of Mytilineos Holdings and Public Power Corporation. He also is long January 2015 $7 calls, long March 2014 $4 puts, and long $5 puts on National Bank of Greece (ADR), and long National Bank of Greece Deccember 2017 warrants (Athens listed).

The Motley Fool recommends and owns shares of Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

The Motley Fool recommends Coca-Cola. The Motley Fool owns shares of Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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