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Europe's battered economy may actually be finally showing signs of life here's what happened because we've heard those headlines before couple months ago but now we got better than expected.
Economic data hitting the markets we've got someone who's got two important ways to play Europe's recovery.
Without even buying European starts and he says you need to focus on US companies instead.
Joining me now with Steve can make his way to push securities equity analyst OK let's go back her first -- find out why we should believe now just from a couple pieces of -- that it's really a true turn around here.
We're seeing just -- early signs right now Liz you know Europe has been weakening from a demand perspective since mid 2012.
You know Q2 is probably too soon to see any real improvement there we.
Track the PMI's the global semis like everybody else the European PMI's.
We also look at the EC sentiment indicator.
Recently those have turned up really since may we've seen.
A bit of improvement in both indicators but they're leading indicators and could translate into better demand conditions later this year.
Steve I think you make a great point and that is.
Just because it's tentative doesn't mean that now isn't the exact type people should be coming in you do want to be maybe a little bit early and ahead of the curve certainly so if you are.
Let's talk about your theory about buying US stocks and what to look for before we get to your names when it comes to picking -- stock that might benefit from the European recovery.
Well the two important ingredients their lives are that the more cyclical the stock the more leverage is going to have to any sort of a fairway -- to -- cyclical or what you see it.
Yes so is certainly in software we have we have two types of growth we have secular growth from technology trends market adoption.
To new types of computing we also have cyclical trends.
That stem from demand conditions you know in many cases -- enterprise buyers being more or less willing to part with cash and open up their pocketbooks to buy.
Enterprise -- doesn't -- out the -- really means corporations and businesses OKC gave it -- its software lets get your first name.
That is auto desk.
This of course is a huge company here in the United States doing all kinds of architecture software but so I am guessing that there are huge operations in Europe that really like this stuff.
Yes Autodesk is almost 40% of the revenues coming from Europe.
And they are as you correctly identified exposed to architecture and engineering services.
Also heavily exposed to global manufacturing so both of those being very very cyclical -- components of the economy.
See this is I'd like in the story a lot because what you are in essence saying is that this is an opportunity to go for companies.
The exact company Steve that a lot of people -- stay away from over the past year right.
Well he's certainly people you know Autodesk gives a very as a very cyclical name and you know people -- people are more willing to play out when we start to see signs of economic conditions improving.
You're right if if we do see our right improvement that then translates into good fundamentals.
And in some cases it's too late if you've got just purely cyclical play.
I would also say that -- -- -- does have some secular drivers as well.
In terms of their growth of recurring revenue in there mix and and their growth of revenues from their -- but having cyclical component.
And if there is an up turn you know you want to be buying at the front and of that.
And it is only up about 6% over the past year so now let's get your second pick and that's another technology -- but this one's called PTC explain this one.
That's right so PTC is I'd also like unless they sell design software.
In PTC's case it's designed software that helps engineers.
Creative product designs which then become the basis for manufacture products.
So PTC sells to large global manufacturing companies that design products.
And so in in that market position they are heavily exposed to Europe certainly it's another case of near 40% of revenues coming from Europe.
And another a case of a company that that does have a strong cyclical component to their growth because of that exposure to global manufacturer.
Should also let people know that if the S&P is up 22% over the past year which it is this company is up 23%.
So it's actually started to do pretty well.
Steve it's great to have your ideas thank you so much.
Thank you list Steve -- -- of what bush for having a lot of what bush people want that they are furious very target of the other thing and they make money absolute reasons have mud wall another --
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