By Andrew Leckey

There may be possibilities in European stocks that are depressed in price or in stocks of the U.S. multinational companies most likely to gain from European misfortune.

"For investors who haven't had exposure to European stocks, it looks like we're entering a period of some nice buying opportunities," believes Ron DeLegge, editor of "The fact that the worst is still ahead might not be such a bad thing for those seeking to raise their European holdings."

The Vanguard European (VGK) exchange-traded fund that tracks 443 European stocks. Patient investors would be wise to watch closely for ongoing negative news that could push its value down a bit further and turn it into a true bargain, DeLegge said.

That ETF's mutual fund sibling is Vanguard European Stock Index (VEURX). Both funds include primarily large- and mid-cap companies in 16 developed European markets.

"Europe's problems bring attention back to the U.S. and to our economic recovery, which is progressing faster than that of Europe," said Fred Dickson, chief market strategist with D.A. Davidson & Co., Great Falls, Mont. "It also makes foreign investors more positive about holding U.S. dollars and that translates into dollar strength, which is a long-term positive."

He'd look to the top 100 companies in the Standard & Poor's 500 with significant global exposure as most likely to gain from Europe's woes. Stock in healthcare products, mid-tier drug companies and medical devices have the greatest potential, he believes.

With a stronger dollar and weaker euro, U.S. companies can seek European acquisition candidates or expand their European businesses, he said. U.S. companies haven't been aggressive in such overseas expansion, but a weakening euro could set the stage.

"Weakness and doubt in Europe causes investors worldwide to reconsider where they invest," said Andrew Fitzpatrick, director of investments for Hinsdale Associates in Hinsdale, Ill. "The heart of the matter is that taking one more market out of the mix increases the likelihood of investors coming back to the U.S."

Among multinational leaders he finds attractive, Coca-Cola Co. (KO) is a terrific market share leader in the U.S. and across the globe, Fitzpatrick said. Three-fourths of the revenues of the world's largest nonalcoholic beverage company are generated outside the U.S. through its distribution network of more than 200 countries.

Abbott Laboratories is a strong healthcare player that has made numerous acquisition and partnership deals to broaden its worldwide exposure, he added. More than 40 percent of its revenue comes from products other than pharmaceuticals, such as medical devices, blood monitoring kits and nutrition products.

The potential for broad-based world fallout from the European situation remains the big caveat.

"There could be an effect on world markets because they're still fragile right now and reacting to reports -- both good and bad -- so it wouldn't take much bad news to send them into a sharp decline," Fitzpatrick said. "Yet that's less likely because regulators and officials in Europe are keenly aware of what's going on and would intercede to stem market problems where they can."

There is still investment value in Europe, in part because it didn't have the same price run-up. Through cost-cutting and headcount reductions, the European firms have become more like U.S. businesses than in previous decades, he said.

"The No. 1 risk that could send European investment reeling and prompt a global aftershock would be a major failure of a country such as Greece or Spain as it tries to refinance government-issued debt," said Dickson.

But he puts the likelihood of that worst-case possibility at about 20 percent, which isn't enough to squelch thoughts of future investment bargains.

"U.S. investors who are underweighted in stocks now have a good opportunity to rebalance their portfolios and increase stock exposure in rock-solid companies," he said. "In terms of Europe, it's not our favorite place to put money at the moment, but if it becomes cheap enough we could see making some stock commitments to the region."

DeLegge considers putting money into single-country European ETFs too tricky for the time being and is confident that the smartest move is to play the overall region whenever fear pushes prices down further. Thus far, the fear has been focused more on currency and government debt issues, but not so much on the equity markets.

"The problem with the European Union is that the countries are so close together and reliant on one another that their victories and losses are shared," said DeLegge. "Contagion is the key word, because even if France or other stronger EU nations wind up bailing out Greece, it makes them weaker in the process."

The EU has learned that while there is strength in numbers, there can be weakness in numbers as well, he said. The biggest flaw is the EU's lack of one centralized Treasury, which causes unavoidable structural problems whenever trying to cope with an economic crisis, he concluded.

Investing - European Stocks Offer Some Bargains for Investors

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