European stocks are priced for the worst

ON EUROPE

European stocks are, in many cases, still priced for the worst and over-sold. There are also many European stocks with far superior prospects for growth.

Consider the broad industrials sector. It contains stocks with cyclical earnings, and in this macro-environment you would not want to hold them. But the sector also has stocks with strongly recurring earnings. These companies are a different story altogether.  That explains why we have recently bought Schindler. From its headquarters in Switzerland, it makes elevators and escalators worldwide – not least in emerging, and growing, economies. The recurring revenues come from maintenance and servicing contracts, and from what are called “traffic management” systems: high technology that ...