Anne Marie
For years, investors have treated European equities like a bowl of plain oatmeal—filling, maybe, but never exciting. Value stocks, mature sectors, sluggish growth: these are the stereotypes that keep capital flowing to the U.S., where tech dominates headlines and valuations.
But what if boring is beautiful?
And more importantly, what if it's misleading?
Are International Stocks Undervalued?
Let’s start with valuation. As of 2025, U.S. stocks trade at a 43% premium to their international counterparts on a price-to-earnings basis. That’s not just a blip—it’s a structural signal. American equities have been rewarded for growth, liquidity, and profitability, but there’s a growing disconnect between price and fundamentals.
Meanwhile, European exchanges are home to thousands of under-covered, under-valued businesses. The average S&P 500 company has 23 analysts covering it. On European exchanges, many small- and mid-caps have none.
The result? Inefficient markets where price discovery is slow, and mispricings can persist. That includes not just sleepy value stocks—but also real growth opportunities hiding in plain sight.
What Are Good International Stocks to Buy?
That depends on your process. Europe is full of household names like LVMH, Roche, and Nestlé—solid companies with global reach. But the real intrigue lies in the overlooked.
Sweden, for example, has quietly become a growth engine for public markets. Thanks to tax-advantaged retail investment policies and a culture that encourages entrepreneurship, Sweden has listed more IPOs in the past decade than France, Germany, Spain, and the Netherlands combined. Names like Spotify and Klarna are just the start.
In our 2024 Nexus I portfolio, six of our 15 international picks came from Sweden alone.
Other countries offer similar opportunities. Denmark is a biotech powerhouse. Germany's mid-sized industrials (the Mittelstand) are globally competitive. And across the continent, investor apathy is creating pricing gaps that careful research can exploit.
Why Are International Stocks Down?
Part of the answer lies in investor psychology. U.S. markets have become the default. With 71% of global index weight, America’s dominance feeds on itself. But events like the 2025 tariff shock have reminded investors that concentration is a risk, not a virtue.
Europe’s relative underperformance over the past decade has made it look less attractive on the surface. But when you strip out currency fluctuations and sector weighting, much of that lag disappears. While the overall American market has outperformed stunningly over the long term, if we dig deeper into individual secular themes, you can find growth in Europe in lockstep with American growth. European renewable energy, luxury goods, and biotech stocks have all kept pace with U.S. growth stocks.
Should I Buy International Stocks?
If you’re looking for diversification and long-term opportunity, yes—but not passively. International investing today is about selective discovery. The lack of analyst coverage due to regulatory shifts like MiFID II means the odds are tilted in favor of active investors willing to dig.
So no, Europe won't deliver the next trillion-dollar tech platform. But it might host the next 10-bagger you've never heard of. You just need to know how to find it.
The Bottom Line
Europe’s reputation as a "boring" market isn’t totally off-base—many of its indexes are loaded with mature sectors like financials and consumer staples. But that’s only part of the story.
If you look past the headlines and dig into the data, you’ll find underappreciated growth stocks, structural reforms in motion, and inefficiencies ready to be exploited. For investors willing to do the work, boring might just be brilliant.