Top foreign stocks for 2008

The year ahead poses challenges for the global economy - but here are some strategies that should prove fruitful.

<a href='http://money.cnn.com/quote/quote.html?symb=IRE'>Bank of Ireland</a>
Smart value hounds continue to sift through the battered financial sector, looking for stocks that have been unfairly punished for the sins of others. The Bank of Ireland is one such name, suggest fund managers David Herro of Oakmark International and Bernard Horn of Polaris Global Value. The stock has taken a hit as Ireland suffers through its own painful housing slump. But these managers argue that the long-term picture for the Bank of Ireland remains solid, largely because favorable corporate tax rates will result in a continuing flow of businesses and immigrants into the country. The bank also has little exposure to structured investment vehicles or collateralized-debt obligations - those toxic products now wreaking havoc on Wall Street - and its lending operations do not rely heavily on the interbank market, where borrowing costs have increased with the global credit squeeze.

Bank of Ireland expects to post high-single-digit earnings growth for its fiscal year ending March 2008, but the stock - more than 35% off its 52-week high - is trading at less than seven times estimated 2008 earnings. "It's just dirt cheap," says Horn. "The price is now assuming that everything that can go wrong will go wrong." The shares also offer a hefty 7% dividend yield, meaning that you can still get paid handsomely while waiting for the stock to rebound.
Last updated December 14 2007: 11:42 AM ET
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