Europe on Path of Recovery in US Corporate Profits
Europe has been blamed for weak economic conditions at the U. S. multinational companies from past many years. According to a new report, the country is now looking for some sources of profits. The country is now planning to earn some profits that could make some stocks more attractive to investors that were earlier lagged this year.
It has been reported that this gradual recovery of the country is a good sign for the big players of the technology sector, especially those that have the highest exposure to Europe. According to a sources, tech as a group is about
8% cheaper than the benchmark S&P 500 index. This has been estimated on the basis of a price to earnings and it has now been rated as most expensive after 2008.
According to the Bank of America Merrill Lynch data, tech names with some of the highest exposure to Europe have not performed well this year. The latest figures reveal that IBM is down 8.5% on the year and Oracle is up just
3.7%. It has been reported that both the companies gain about 32% of their sales every year from Europe.
Joseph Quinlan, managing director and chief market strategist at U. S. Trust, Bank of America Private Wealth Management in New York, said: "Even a little growth in Europe is going to go a long way to help boost the profitability of U. S. multinationals".
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