US Large Caps with EU Exposure: Winners & Losers
Nearly every large-cap U.S. company has some form of exposure to Europe and some are significantly more at risk than others. So which ones are the most affected and by how much? Roberto Pedone, contributor at TheStreet.com shared his insights.
Apple—"They have about 27 percent exposure to the euro zone and that growth can get hit as consumers in the EU...are not going to buy iPads and iPhones," Pedone told CNBC. "I’m concerned about Apple—the share price has been breaking down recently."
Citigroup, JPMorgan, Morgan Stanley—"They have sizeable exposure to Europe and we could see the U.S. banks get dragged into this problem as they may have to go back to more writedowns, just like in 2008 with the subprime crisis."
However, Goldman Sachs could benefit from the problems in Greece, he said.
"We saw their last quarter reportand they were making money every day, so I’d imagine they’re short the euro, Greek debt—and looking to short the other PIIGS nation* debts."
Berkshire Hathaway—"[Warren Buffett] recently said that he has exposure to the German reinsurance companies, so that’s the exposure he has to the euro," noted Pedone.
"What’s interesting is that in the 13-F filings, he had decreased exposure to Johnson & Johnson and Kraft Foods, which both have 20 percent exposure to the EU."
Pfizer—They have around 20 percent exposure to the EU, he said.
Merck—"They just recently bought Schering Plough—and Schering had around 40 percent exposure to the EU."
Electronic Arts—"They have around 38 percent exposure to Europe, but that might be beneficial to them because people are out of work and may likely play videogames at home," said Pedone. "They can actually benefit from the extra exposure to Europe."
*PIIGS nations: Portugal, Italy, Ireland, Greece and Spain
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No immediate information was available for Pedone or his firm.