Hewlett-Packard (NYSE: HPQ) sold off on news of trouble in Europe. The region is critical to the tech company’s sales. Citigroup (NYSE: C) shares also lost ground. There are concerns about how much European sovereign debt the bank holds.
A large number of mega-cap American companies will be hurt if the continent’s financial problems spread including McDonald’s (NYSE: MCD), Apple (NASDAQ: AAPL), Ford (NYSE: F), and Caterpillar.
But, there are still public companies that do almost no business in Europe and some of them only have US-based revenue. If Europe’s situation gets worse, the become “safe havens” among equities which trade on American Exchanges
1. The New York Times Company (NYSE: NYT). It has a very small exposure in Europe because of the International Herald Tribune, but that is a rounding error in its numbers. It prospects have improved as the ad market has rebounded.
2. Sirius (NASDAQ: SIRI) brings in all of its revenue from North American. After a tough time almost two years ago when it looked like the company would collapse, it found new funding and is growing again. Sirius depends on new car sales in the US for most of its new business, and new cars sales are rebounding.
3. Corrections Corporation of America (NYSE: CXW). As its most recent earnings show, business in the jail business is booming. The market thinks so. The stock trades near its 52-week high. And, its sales are almost all in the US.
4. Southwest Air (NYSE: LUV) is already considered the best run airline in the US. And, it makes money most quarters even when the industry is troubled. Unlike other American carriers, it has no routes outside the US.
5. Beazer Homes (NYSE: BZH) also trades near a 52-week high, a sign that the market thinks housing will recover. It only builds homes and owns property in the US.
6. NetFlix (NASDAQ: NFLX) is still growing rapidly in both subscribers and revenue. Its DVD by mail and streaming of movies have lifted that firm’s prospects. Another firm that is, for practical purposes all US.
7. Sprint (NYSE: S) may not be the best wireless carrier in the US and it may not have the most subscribers. But, its new 4G WiMax product is pulling in new customers and it has no exposure offshore.
8. Baidu (NASDAQ: BIDU) is the largest search engine in China. Its prospects have improved since Google (NASDAQ: GOOG) has essentially left the market. A company that has no exposure in Europe, or the US.
9. Fifth Third Bank (NASDAQ: FITB) is one of the largest super-regional banks. Based in Cincinnati, if has very little revenue from outside the US. Wall St. likes the company which trades near its 52-week high.
10. Sears Holdings (NASDAQ: SHLD) has no stores in Athens or Madrid. A real retail company turnaround with improving prospects as retail sales and consumer spending rises.
Europe may get much worse, particularly if it looks like Spain or Portugal might default on their sovereign obligations. Companies with exposure in the region are bound to sell off quickly if the situation there worsens.
Douglas A. McIntyre
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