5 High-Quality Stocks in the Mediterranean

Episode 5 of World Travels Series aimed at seeking good companies

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James Li
Dec 17, 2020
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According to the High Quality Screener, a Premium All-in-One Screener template, five high-quality stocks based in Mediterranean countries are Diasorin SpA (

MIL:DIA, Financial), Koza Altin Izletmeleri AS (IST:KOZAL, Financial), Pharmagest Interactive (XPAR:PHA, Financial), Recordati SpA (MIL:REC, Financial) and Hermes International SA (XPAR:RMS, Financial).

The Mediterranean countries include the countries bordering the Mediterranean Sea: Spain, France, Italy and Turkey.

GuruFocus expands market valuation concept to global markets

GuruFocus applied Berkshire Hathaway Inc. (

BRK.A, Financial)(BRK.B) CEO Warren Buffett (Trades, Portfolio)'s favorite market indicator to several global markets, including European and Asian countries. Table 1 summarizes the market valuation ratio and implied market return for the Mediterranean countries.

Country

Market Valuation Ratio

Historical Median Ratio

Total Implied Market Return per year

Spain

58.47%

87.77%

10.1%

France

89.08%

87.81%

2.4%

Italy

14.78%

19.37%

5.9%

Turkey

23.45%

27.85%

13.7%

Table 1. Implied market returns assume reversion to the 10-year median market valuation ratio.

As Table 1 illustrates, the stock markets of Mediterranean countries are undervalued based on Buffett's market valuation concept, suggesting the potential for good investing opportunities. The following video further discusses the global market valuation pages and seeks high-quality companies among Mediterranean countries.

The High Quality Screener listed five companies meeting the criteria as of Thursday.

Diasorin

Diasorin provides tests done on human samples of blood and tissue. GuruFocus ranks the Italian diagnostics and research company's financial strength and profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a double-digit Altman Z-score and profit margins and returns outperforming over 90% of global competitors.

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Gurus with holdings in Diasorin include the

Wasatch International Growth (Trades, Portfolio) Fund and the Royce International Premier Fund (Trades, Portfolio).

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Koza Altin Izletmeleri

Koza Altin Izletmeleri owns four operating gold mines around Turkey and the surrounding region. GuruFocus ranks the company's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and operating margins that have increased approximately 2.3% per year on average over the past five years and are outperforming over 97% of global competitors.

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Pharmagest Interactive

Pharmagest Interactive provides information technology services for pharmacies and the pharmaceutical industry. GuruFocus ranks the French health care services company's profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased approximately 2.8% per year on average over the past five years and is outperforming over 95% of global competitors.

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Recordati

Recordati produces and promotes medicines for primary-care therapies and rare diseases. GuruFocus ranks the Italian drug manufacturer's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased approximately 6.20% per year over the past five years and is outperforming over 95% of global competitors.

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Hermes

Hermes retails luxury goods, including well-known Birkin and Kelly bags. GuruFocus ranks the French retail company's profitability 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased approximately 2.3% per year on average over the past five years and is outperforming over 97% of global competitors.

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Disclosure: No positions.

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I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!