With many U.S. equities trading at all-time highs and the stock market as a whole trading at a hefty earnings multiple, the U.S. market isn't looking that attractive. By contrast, Europe's economy is rebounding, and there are still many companies that have reasonable valuations because of where they are headquartered. 

Many analysts believe that Italy -- a country that is going through its most difficult time since World War II ended -- will be one of the first economies in the eurozone to rebound as the recession in Europe ends and growth resumes. 

Italy has a diversified industrial economy, which is driven by the production of high-quality consumer goods produced by medium-sized enterprises. It is the third-largest economy in the Eurozone in terms of nominal GDP. Structural impediments to growth and public debt have weighed down investor sentiment. Even so, the government appears to have enacted several reforms that should catalyze growth and get Italy back on track.

So what companies should you consider?

The largest Italian telecom
Telecom Italia (NYSE: TI) is Italy's largest telecom company. During the mid-1990s, like many other countries, Italy privatized its previously state-owned telecom companies. In 1994, Telecom Italia formed when several of these telecom companies merged. Telecom Italia provides landline and mobile phone services in Italy and fast-growing countries such as Brazil, Argentina, and Paraguay. Telecom Italia also controls one of the main Italian television companies, Telecom Italia Media, and owns Olivetti, a company that manufactures computer hardware. What's more, Telecom Italia has a significant stake in a company I previously wrote about, Telecom Argentina, which has nearly doubled since that article.

A concern, however, is Telecom Italia's debt, which Standard & Poor's recently downgraded from stable to negative, while confirming its BBB-rating. Still, at around $8 per share, there is considerable upside potential. After all, Telecom Italia produces a 20% free cash flow yield (well ahead of its peers), has around a 60% share of the Italian market (close to a monopoly), pays a reasonable dividend of more than 3% (which it could increase once consumer spending picks up), and is well-positioned to grow in South America.  

The largest Italian company
Eni (E 1.18%) is Italy's largest company by revenue and market cap. Because of its strategic importance, the Italian government holds around a 30% stake in the company. Over the years, Eni has successfully partnered with Gazprom on various projects that have enabled them to supply gas across Europe. Eni had several major natural gas discoveries in 2011 and 2012 that it is yet to fully exploit.

Eni has improved its production capacity in areas such as Venezuela, Kazakhstan, Iraq, Africa, the Yamal Peninsula, and the Far East. Exploration and reserve replacements are major drivers for Eni, which has a reserve replacement ratio of more than 100%. With projects that should improve production -- and oil flirting with $110 per barrel amid fears of supply disruption as violence in Egypt and Syria continues -- Eni looks like a solid bet. Eni generates more than $125 in revenue per share, more than both Exxon and Chevron. So even very modest success in executing cost-cutting plans should not only improve Eni's profitability, but also provide for a dividend boost and significant share price appreciation.

The world's largest eyewear company
Luxottica Group (LUXTY) is the world's largest eyewear company. Luxottica has several household brands in Oakley, Persol, Ray-Ban, Oliver Peoples, and to a lesser extent in Arnette, K&L, Eye Safety Systems, Revo, Sferoflex, and Vogue. This company has a vertically integrated business model, which means Luxottica is involved in both manufacturing and retailing its products. The model works well for Luxottica because of its manufacturing excellence, geographically diversified footprint, and focus on quality and customer service. Its vertically integrated model has led to greater efficiency and speed in product design, engineering, manufacturing, and logistics. Direct control over the production platform makes it possible to verify the quality of the products, introduce innovations, discover new operating methods, and control costs.

Also, Luxottica's distribution enables it to gain a deep understanding of its users' needs and tastes, and to offer its products in both developed and emerging markets. For those and many other reasons, Luxottica is well-positioned to grow both organically and through acquisitions. At Luxottica's current price point, despite its strong growth story, you might want to wait for the shares to pull back before initiating a long position.

My Foolish take 
Compared to many other markets, Italy looks inexpensive and is well-positioned to benefit from a recovery in the eurozone. Of the companies listed above, Eni is a safe long-term bet with short-term catalysts, Telecom Italia is a risky company but appears to have bottomed out and could be a two-bagger, and Luxottica, although a bit pricey, is a solid growth story.