Saturday, 16 June 2012

How to Profit From the Great Greek Bankruptcy of 2012

Don't play a starring role in this big, fat Greek tragedy

So how can investors position themselves to profit from all this, if events play out according to plan? First and foremost: with patience. The Athens Stock Exchange Index has fallen far already -- down about 63% over the past year. But Russia's RTS took a pounding prior to its default, too, and that didn't save it from sliding further post-default.
The low P/E ratios on stocks like National Bank of Greece (NYSE: NBG  ) or Coca-Cola Hellenic Bottling (NYSE: CCH  ) may tempt investors today, but have no doubt: They could get even cheaper in the event of an official exit from the euro. A "Grexit" could likewise spark selling of foreign-listed but Athens-based shipping companies such as DryShips(Nasdaq: DRYS  ) , Diana Shipping (NYSE: DSX  ) , and Excel Maritime (NYSE: EXM  ) .
Long story short, there will be a time to profit from the great Greek bankruptcy of 2012. But that time is... not yet.

National Bank of Greece (NYSE: NBG  )

 Coca-Cola Hellenic Bottling (NYSE: CCH  

 DryShips(Nasdaq: DRYS  )

 Diana Shipping (NYSE: DSX  )

Excel Maritime (NYSE: EXM  ) .

Stocks Near 52-Week Lows Worth Buying

Just as we examine companies each week that may be rising past their fair value, we can also find companies potentially trading at bargain prices. While many investors would rather have nothing to do with companies tipping the scales at 52-week lows, I think it makes a lot of sense to determine whether the market has overreacted to the downside, just as we often do when the market reacts to the upside.
Here's a look at a fallen angel trading near the 52-week lows that could be worth buying.

It's all about being greedy when others are fearful. 

Coca-Cola Hellenic (NYSE: CCH  ) , the second-largest bottling company in the world and the exclusive bottler of Coca-Cola (NYSE: KO  ) products in the region, exclusivelydistributes sparkling beverages, juices, and energy drinks in 28 countries. Because of weakness in the region and heavy investments into the company over the coming years, results haven't been fantastic, as is evidenced by the 2% drop in unit volume and its cash outflow of 32 million euros in the latest quarter.
However, investors need to keep in mind that barriers to entry remain extremely high in bottling. The Coca-Cola brand name when combined with Coke's marketing budget give Coca-Cola Hellenic incredibly strong pricing power. It's also worth noting that energy drinks and Coke Zero products showed strong year-on-year growth. At less than 10 times forward earnings, Coca-Cola Hellenic has a good mix of value and a strong brand name at its current price. 

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