The more I listen to companies, the more I think that the next hot geographic area is none other than the U.K.
This scrappy nation isn't tied down by the euro and is committed to growth with a smart, new governor of the Bank of England in Mark Carney, who has a honeymoon going that has made an otherwise fractious situation harmonious, and there's no longer any bad will from all of those bank bailouts.
So, how do you play it?
How about with the iShares MSCI United Kingdom Index (EWU)? I am watching the U.K. exchange-traded fund, and when it comes in, I believe it will be a buy. Look at these top holdings:
- HSBC (HSBC), the gigantic worldwide bank that is just now coming back to life along with the other European banks.
- Vodafone (VOD), which is getting a ton of money from Verizon Wireless while it expands around the world.
- I want to own BP (BP) but I would like to own it in a basket in case that crazy court in New Orleans just keeps the BP cash register open to pay -- endlessly -- for its Macondo sins.
- You also get what is one of the most bad-going-to-good companies in the oil patch, and that's Royal Dutch Shell (RDS.A, RDS.B). What can I say about this once-slothful company? It's much improved with a good yield.
- My charitable trust owns GlaxoSmithKline (GSK), which has been a difficult stock because of the Chinese situation. It's about to report and it has a full pipeline so if it gets hit, it's a buy.
- I am not a big fan of tobacco, but British American Tobacco (BTI) is in solid shape, perhaps better than Altria (MO), at least today.
- Diageo (DEO) is my favorite spirits company because of its Asian expansion.
- BG Group is steady as she goes.
- AstraZeneca (AZN) is a dirt-cheap drug stock.
As I wrote yesterday, Europe is in turnaround mode. The country that could benefit the most from that? I'd go with the U.K.; specifically, I'd go with the EWU.