A lot of Australian investors will be reluctant to invest overseas directly as it involves extra paperwork, currency risk, and no franking credits attached to dividend payments.
However, if you don't fancy the paperwork or additional research one option is to invest with a local fund manager who'll do all the stock picking for you and more.
Star stock picker, Jacob Mitchell, of Antipodes Partners recently named a European tech business he believes could offer better returns than popular tech plays such as Apple Inc. or Amazon Inc. in the years ahead. While local blue-chips like Telstra Corporation Ltd (ASX: TLS) have gone backwards for years now.
According to Mr. Mitchell this European tech company has a"spectacularly profitable" emerging operating division that is still flying under-the-radar of the market.
The company in question is Frankfurt-listed Siemens Inc. (ETR:SIE), which is already worth around EUR79 billion thanks to it being Europe's largest industrial hardware manufacturer. In fact older readers may remember it as the company behind the first sliding mobile phones.
However, like a lot of innovative companies, Siemens is now moving deep into the very profitable software space.
"Siemens is a big conglomerate in a process of slimming down and spinning off various business divisions," said Mr Mitchell.
"At the end of this we will be left with a company we think could generate half its earnings from what it calls the Digital Factory Division."
This division is about helping companies replace human labour with robotic or digital technologies to help them save time and costs via automation or digital shortcuts. As such it's a fast-growing area and according to Mr Mitchell, Siemens has bags of potential to capitalise on it while still looking cheap as a stock.
"Pure play factory automation stocks trade around 25x earnings, but Siemens trades around half that valuation, we believe it's only a matter of time before the market wakes up to Siemens' potentially explosive Digital Factory Division," Mitchell said.
