Europe/negative Analyst's sentiment

Is the Old Continent still a contrarian play? (July 2015)
European fear may be profitable for greedy investors ( Analysts hate European stocks)

Analysts hate Europe (2015 Q2)as Michael Brush is writing about Europe being a contrarian play: There’s one telling measure that suggests it still is: European stock analysts are the most bearish they have been in the past 20 years. That is a state of affairs typically followed by outsized gains.

How negative? Only 41% of stock ratings by sell-side analysts are “buys,” according to Barclays Research. Amazingly, that share is lower than during the 2009 meltdown, the tech sell-off at the turn of the century and the 1996-97 emerging markets crisis.

Whenever the percentage of “buy” ratings is that low, notes Barclays, the European market has typically risen in the following year.

Valuation: Over the past 10 years, the MSCI Europe Index has traded for an average price-to-earnings ratio of about 20. But now it is around 16, points out Andrew Clifton, a European equity portfolio specialist with T. Rowe Price.

my remark: Believing earnings will NOT decrease, a PE-ratio of ca. 16 sounds reasonable ( = not overvalued)

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