The Top 3 Ways to Play the Coming Comeback for Greece

Stocks to buy

A subject you don’t read about a lot in the business media is investing in Greece. Europe? Sure. Even Latin America. But Greece? Not so much. 

In December, I noticed an article from Barron’s that discussed why Greece’s turnaround is underway. John Paulson, the hedge fund guy, is big on the Greek markets. 

“Greece’s stock market is already up 40% so far this year, and some major investors expect it has more room to run. Hedge fund billionaire John Paulson, a long-time investor in the country, is bullish and looking for more opportunities,” wrote Barron’s contributor Patti Domm on Dec. 19.

“‘One measure is the value of the stock market to the total economy. It’s about 30% in Greece today. The previous peak was 80%, and the European average has been 80%,’ Paulson said.”

The difficulty for the average do-it-yourself is finding Greek stocks to buy that aren’t over-the-counter. There are brokers such as Interactive Brokers Group (NASDAQ:IBKR), which can seem daunting to smaller investors. For Paulson, he’s got a whole company to help him. 

However, if you like investing in Greece, here are three ways to do so. 

Global X MSCI Greece ETF (GREK)

Source: shutterstock.com/Imagentle

The easiest way to invest in Greece is to buy the Global X MSCI Greece ETF (NYSEARCA:GREK). The ETF tracks the performance of the MSCI All Greece Select 25/50 Index, investing in the largest and most liquid companies in Greece. 

“GREK is the first and only ETF to directly target Greece,” Global X’s website states

Because it can be challenging to invest in Greece from the United States, it’s understandable that the ETF has managed to gather more than $185 million in net assets.

The ETF currently invests in 26 companies. These companies have a weighted average market capitalization of $4.11 billion, a 16.6% return on equity, and an 8.5 price-to-earnings ratio. 

The top three sectors by weight are financials (41.8%), industrials (18.4%), and utilities (11.1%). Interestingly, there is no tech component. That in itself makes GREK an outlier from most ETFs. 

As of Dec. 31, 2023, GREK’s one-year return was 42.7%. Over the past five years, its annualized return was 15.1%. That’s slightly better than the S&P 500.

It charges 0.57% annually, which isn’t too bad for an emerging market.  

National Bank of Greece (NBGRY)

Source: Shutterstock

National Bank of Greece (OTCMKTS:NBGRY) is an ADR (American Depositary Receipt) trading over-the-counter in the U.S. The bank was founded in 1841, making it the first bank of the modern Greek state. 

In business for 182 years, it has approximately 356 branches across Greece, serving six million clients and 2.8 million active digital banking users. The bank is the largest holding of GREK, representing 13.89% of the ETF’s net assets. 

As I look at the bank’s Q3 2021 press release, its CET1 capital ratio stands out as a big positive at 17.9%, up from 17.3% in Q2 2023 and 15.2% a year ago. By comparison, JPMorgan Chase’s (NYSE:JPM) CET1 ratio was 14.3% at the end of September. 

Now, I’m not suggesting it’s in the same league as Jamie Dimon’s baby, but it’s much better than what one might expect from a Greek bank.

With 35.32 billion euros ($38.40 billion) in loans and 56.29 billion euros ($61.20 billion) in deposits, it’s more than holding its own with banks in other emerging markets. 

Coca-Cola HBC (CCHGY)  

Source: Jonathan Weiss / Shutterstock

Coca-Cola HBC (OTCMKTS:CCHGY) bottles and sells Coca-Cola (NYSE:KO) products in 29 countries, including Egypt, its newest market, which it entered in January 2022, with the acquisition of 52.7% of the Coca-Cola Bottling Company of Egypt. Later that month, it acquired an additional 42%. It now holds 94.7%.  

Other countries in which it operates include Austria, Ireland, Croatia, Latvia, Belarus, Nigeria and Greece. 

The Greek portion of its business started in 1969 as the Hellenic Bottling Company based in Athens. In 1991, its shares were listed on the Athens Stock Exchange. On Aug. 9, 2000, Hellenic merged with Coca-Cola Beverages plc to form Coca-Cola Hellenic Bottling Company. It listed its ADS’ (American Depositary Shares) on the NYSE in October 2002. 

However, once it was listed on the London Stock Exchange in April 2013, its NYSE listing became redundant. It was delisted on July 24, 2014. The company officially moved to Zug, Switzerland, in April 2013 to lower its corporate tax rate. The European Parliament’s November 2015 report on multinational corporate taxation suggests the company saved 30 million euros ($32.6 million) in tax in 2014 alone.    

The company’s been busy in the last couple of years making acquisitions. In August 2022, it acquired the super-premium Three Cents brand of mixers for 45 million euros ($48.9 million). In June 2023, it made an even bigger splash, acquiring Finlandia vodka from Brown-Forman (NYSE:BF.B) for $220 million. Coca-Cola HBC distributed the product for 17 years, so it was a logical choice to purchase the brand from the maker of Jack Daniels.  

If you want an even safer way to play it, Coca-Cola owns 21% of Coca-Cola HBC.   

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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