Is value emerging as a driver of EU stocks?

ON EUROPE

Europe investors were right to shun value plays in recent years, but lower price premiums are now emerging as a key metric of stock performance, argues Neptune's Rob Burnett.

The European crisis is over and the region has embarked upon an economic expansion that should last years. The outlook for the equity market ought to be strong as there is a high probability that revenue and margins will expand in the 2014-2017 period. The crisis was not primarily about debt, but instead about competitiveness. Relatively high debt to GDP is sustainable if a country is competitive. Once a country posts a current account surplus, it can control its own destiny, with no need for external funding. The sharp rally we have seen in sovereign bond markets is therefore only pa...