The seven European stocks Warren Buffett should buy

European broker CA Cheuvreux has penned an open letter to billionaire US investor Warren Buffett, urging the Sage of Omaha to buy into ‘bottomed out’ European equities.

Buffett has just 4% of Berkshire Hathaway tied up in European firms, with the vast majority of his investments in US companies.

Cheuvreux told Buffett now is the best time to buy into the best blue-chip firms Europe has to offer, with share prices hitting depressed levels.

The group focused on five key industries, insurance, retailing, household care, capital goods and automotives, which have been favoured sectors throughout Buffett's career.

It named AXA, Zurich, Hennes & Mauritz, Unilever, Volkswagen, Daimler and ABB as seven stocks Buffett should be holding.

"European equities have recently bottomed out, reaching very attractive valuation levels," said the broker.

"When we compare the European champions we have selected to deals made by Berkshire Hathaway in the US, we see that these European stocks offer higher growth potential and more attractive valuations.

"We believe these seven stocks underline the value investing opportunity in as concern about euro zone debt has brought about unprecedented value in many areas."

Buffett owns four European stocks with stakes in Tesco, Sanofi-Aventis, Swiss Re and Munich Re.