Among his favorites is Total, the French oil giant. "Total runs as good a business as Exxon," Maxwell says. "It has a low cost structure. And they have good relationships with certain countries that gets them favorable treatment in developing oil reserves."
He also likes a couple of European pharmaceutical giants. One is the French company Sanofi-Aventis, which recently traded at seven times forward earnings, sported a 4% dividend yield and had been aggressively cutting costs. That said, the company does face some drug pipeline issues.
"There is no question they face expirations for some large drugs like Plavix, Lovenox and others," Maxwell says. "They are going to try and offset these losses with new drugs, vaccines, geographic expansion and cost cutting. Execution will clearly be important."
The other company he likes is Roche Holding in Switzerland, the world's largest biotech company, after it bought full ownership of Genentech earlier this year. Maxwell says Roche's cancer drugs will face very little near-term risk from competition or patent problems. He adds that new indications for the company's existing drugs, along with its solid drug pipeline, should allow the company to grow with a reasonable valuation.
Maxwell's fund is underweight in Europe, but he sees some of the continent's multinational companies as great ways to play the global economy. "The world is going through an infrastructure build and that's a positive for a lot of European industrial companies," he says.
Among them are two French companies--Alstom and Technip. Alstom is a global leader in both power plants and trains, while Technip is an engineering and construction company serving the oil and gas industry.
Going Global
Despite Europe's various economic woes, the continent fared well according to a survey released in September by the Geneva-based World Economic Forum that ranked the world's most competitive economies. Switzerland dethroned the U.S. for top spot, while Sweden, Denmark, Finland, Germany and the Netherlands also made the top ten.
The survey didn't mention problems surrounding Swiss banking secrecy, though it did note that the country's financial markets had weakened somewhat. Still, James Moffett, the lead portfolio manager of the Scout International fund, says he's been building the fund's stake in Swiss financials. And he's a fan of Switzerland in general.
"That's where we're as overweight as anywhere," says Moffett, whose fund portfolio recently was 56% in Europe. "There's a top-notch machinery and equipment company in ABB Group and a food leader in Nestlé. And it has a good number of health-care companies."
One of Moffett's favorite themes in Europe is health care. "It's out of favor, but the underlying growth is still there," he says. Among his favorite companies is Novo Nordisk, a Danish concern that's among the global leaders in diabetes care. Another is Fresenius, a German company that's a major global player in dialysis products and services.