Barron's Strong Dollar European Stock Plays
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Date updated:11-08-2008

Big European drug and oil companies could benefit from the dollar's recent rally against the euro. But retailers on the Continent who pay for goods in dollars could be harmed.

symbol name last price % change open
  • +
  • BP
    Bp Plc
  • $57.83
  • -1.36%
  • $57.38

With oil down sharply since July, big energy producers such as BP (BP) and Royal Dutch Shell (RDSA, RDSB) could be contrarian dollar plays, Draaisma says. "Oil companies have a lot of things you want, like strong balance sheets and high dividend yields, but they also have some cyclical exposure," he notes.

People owning BP also tend to own: BACCBSHCLEDFITBFREGE

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  • +
  • RDS.A
    Rds.a
  • $0.00
  • N/A
  • $N/A

With oil down sharply since July, big energy producers such as BP (BP) and Royal Dutch Shell (RDSA, RDSB) could be contrarian dollar plays, Draaisma says. "Oil companies have a lot of things you want, like strong balance sheets and high dividend yields, but they also have some cyclical exposure," he notes.

People owning RDS.A also tend to own: AAUKABCAEGAETAHLAKHAXCA

TheStreet.com Rating: No Rating What is this?

  • +
  • RDS.B
    Rds.b
  • $0.00
  • N/A
  • $N/A

With oil down sharply since July, big energy producers such as BP (BP) and Royal Dutch Shell (RDSA, RDSB) could be contrarian dollar plays, Draaisma says. "Oil companies have a lot of things you want, like strong balance sheets and high dividend yields, but they also have some cyclical exposure," he notes.

People owning RDS.B also tend to own: BHPCAJCMXHY.PKEONGY.PKHBCNSRGY.PKRHHBY.PK

TheStreet.com Rating: No Rating What is this?

  • +
  • TOT
    Total S.a.
  • $61.91
  • -1.40%
  • $61.62

France's Total (TOT) is another potential beneficiary of a stronger U.S. currency.

People owning TOT also tend to own: ADMAIZALLCBCNICOPCSC

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  • +
  • XTA.L
    Xstrata
  • $1070.00
  • 0.00%
  • $1080.00

On the downside, shares of miners, such as Xstrata (XTA) and Rio Tinto (RTP), have shown the biggest negative correlation to greenback rallies.

People owning XTA.L also tend to own: LMI.LRIO.LAAL.LALG.LANTO.LAVE.LBD36.L

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  • +
  • RTP
    Rio Tinto Plc Ads
  • $211.90
  • -0.91%
  • $207.75

On the downside, shares of miners, such as Xstrata (XTA) and Rio Tinto (RTP), have shown the biggest negative correlation to greenback rallies.

People owning RTP also tend to own: AXAFDXNOKNUESLBTMAAPL

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  • +
  • RHHBY
    Rhhby
  • $0.00
  • N/A
  • $N/A

With pharma shares down only 11% in a year that has seen many stocks crater by 30% or 40% or 50%, the industry's charms aren't exactly undiscovered. Still, Roche Holdings (RHHBY) and Novartis (NVS) remain in the Morgan Stanley European model portfolio, and could continue to outperform, Draaisma says. GlaxoSmithKline (GSK) derives about 45% of sales from the U.S., and also could be helped by a higher buck. Historically, price increases in all three drug stocks have been among the most highly correlated with a rising dollar.

People owning RHHBY also tend to own: ABBAPCBASFYBBLBNSCATCHL

TheStreet.com Rating: No Rating What is this?

  • +
  • NVS
    Novartis Ag Ads
  • $53.13
  • -0.30%
  • $52.78

With pharma shares down only 11% in a year that has seen many stocks crater by 30% or 40% or 50%, the industry's charms aren't exactly undiscovered. Still, Roche Holdings (RHHBY) and Novartis (NVS) remain in the Morgan Stanley European model portfolio, and could continue to outperform, Draaisma says. GlaxoSmithKline (GSK) derives about 45% of sales from the U.S., and also could be helped by a higher buck. Historically, price increases in all three drug stocks have been among the most highly correlated with a rising dollar.

People owning NVS also tend to own: ANNAUYBACBHIERICFGE

TheStreet.com Rating: B What is this?

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