Two Fantastic French ADRs That Will Beat the Country's Contraction

Despite the fact that the French economy is not picking up, there are two great French ADRs worth analyzing: Criteo and

Jul 8, 2014 at 7:35PM

As you might have heard, the French economy is not in its best shape. As a matter of fact, it is showing signs of contraction. According to the most recent flash Purchasing Managers' Index report, or PMI, released by Markit, France is showing weaknesses in the both the manufacturing and the services sectors. The composite PMI for the country fell to 48 from 49.3 in May. Unfortunately, a figure below 50 means contraction. In addition, the report shows that output in the country is down for the second successive month, orders are falling slightly, and staffing levels suffered their sharpest cut in four months -- not so encouraging.

However, two French ADRs are enjoying a strong momentum. One is Criteo (NASDAQ:CRTO), a technology company specialized in digital performance advertising. Let's check them out!

Outstanding results
The first quarter of 2014 saw record figures for Criteo. Revenue increased 60.8% year over year to $207.5 million, and the company's total number of clients grew 46% year over year to 5,567. Now Criteo holds new and promising accounts with a high amount of traffic, such as Visa and

After three years of development, Criteo just rolled out significant technical enhancements to its proprietary prediction and recommendation engine. Basically, this new technology enables Criteo to decide whether to buy each ad impression based on the probability that a user will both click on the ad and make a purchase on the advertiser's site. Now clients will be able to expand their reach to a greater number of potential buyers without paying more per sale. In fact, this breakthrough has brought a 38% sales increase while maintaining the same cost per of sale.

Technically speaking, predicting whether an ad impression will generate a click and a sale is not an easy task, as that happens about once out of every 10,000 impressions. But this new improvement will not only improve the accuracy of Criteo's predictions but also help customers maximize the reach and effectiveness of their marketing campaigns.

Criteo's global reach is second only to Google Display Network's. According to comScore, Criteo is reaching nearly 1 billion unique Internet users per month. The company manages to reach a large and growing group of Internet users whom other major marketing channels don't. In fact, nearly 50% of Internet users worldwide who saw a Criteo ad were not exposed to Google search ads.

Criteo's new engine improvement is set to greatly expand the company's business. It brings pure benefits at the same cost for clients, so it should attract more new clients to the company.

Another intriguing ADR
If Criteo is not enough, there's another French company positioned to grow: Veolia Environnement SA (NASDAQOTH:VEOEY), which is the world's largest environmental-management services company, having a presence in 48 countries. The strong business case for Veolia is pure demographics. The world will need more clean water in the future -- there's no way around it. In fact, according to the World Health Organization, demand is expected to exceed supply by 40% by 2030. Most of it is related to the lack of access to freshwater sources and irrigation mechanisms. Government and NGO investments to revert this situation are likely to push demand for Veolia's services going forward.

Veolia already provides about 100 million people with drinking water and brings sanitation solutions to 71 million people while also managing 60 million metric tons of waste every year. The company's extensive knowledge and international presence should help it get more service contracts going forward; the growing demand is out there already. Almost half of Veolia's total turnover of $30.4 billion is generated outside France. Plus, these types of contracts last at least a few years and hold a high chance of being renewed. 

Price-wise, Veolia's stock has soared 60% over the past year, yet it's not even close to its all-time high. Currently, Veolia is priced at around $18, but in late 2010 it reached prices near $40.

VE Chart

VE data by YCharts.

Veolia is a solid and stable business to bet on for the long-term. The company's competitive position and the growing demand for clean water are on our side.

Final foolish takeout
France is giving us a few signs that the country's economy is losing dynamism. However, these two French ADRs look promising going forward. Both are well-positioned within their markets, and their businesses are not significantly exposed to France.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Louie Grint has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers