European markets are showing signs of severe distress. Short-term government bond yields in Greece now top 90% in Greece and 17% in Portugal. German and French stocks ended the third quarter down more than 25%. Italian stocks dropped nearly 33%. With protests and strikes as common as wild stock market swings, a default or structural shift in entitlement beleaguered Europe seems almost a given.

Yet, even amid the dismal headlines, now might be the time to begin looking at European stocks, which have been given the pariah status afforded to dot-com stocks after the 2000 collapse: unquestionably weak and widely avoided amid a relentless negative news cycle. But not unlike Amazon, Priceline or a few other bubble-era survivors which went on to achieve substantial growth, the best European equities will eventually rise again.

A few weeks back, we looked at Greek shipping stocks. Here are a few more fund and stock ideas to consider:

BLDRS Europe 100 ADR Index (ADRU) consists of 100 European primarily large-cap stocks traded as ADRs on U.S. exchanges. With nearly 20% of holdings in financial stocks, the fund has dropped to 2003 levels, although it has benefited in recent weeks from relative strength in Novartis (NVS), tobacco giant British American Tobacco (BTI), Vodafone Group (VOD) and an underweight allocation to Europe's most troubled economies. With nearly 50% of assets allocated to the United Kingdom, the fund currently yields 2.5% and recently crossed above its 50-day-moving average, an encouraging near-term sign.

In terms of sectors, telecom has already shown notable strength in the fourth quarter, buffeting many of the stocks which have been decimated during the region's collapse. Although domiciled in extremely distressed economies, companies like Telecom Italia (TI) and Spain's Telefonica (TEF) trade at fraction of their decade-highs with comparatively rich dividends. France Telecom (FTE), now back down to 2002 levels, yields over 10%. The UK's BT Group (BT) sits at half its 2007 high and yields over 4%. (Also read Europe's Plunge Leaves 9% Yields.)

Just like their larger brethren, Europe's small-caps have also taken their lumps. A lesser followed fund like WisdomTree Europe SmallCap Dividend ETF (DFE) tracks 367 value-oriented European stocks, most of which aren't listed in the US. Still down 50% from 2007 levels, the fund yields over 4.5% and its holding trade at only 1.27x book value, compared to 1.9x for the S&P 500, indicating a relative value.

Among developed European countries, few have been hit as hard as Ireland, which has already nationalized large parts of its troubled financial system, including Anglo Irish Bank. The Irish Stock Index remains down 74% from its 2007 peak, the equivalent of the Dow Jones Industrial Average trading at 3,600.

MSCI Ireland Capped Investable Market Index Fund (EIRL), the only domestic pure-play Irish ETF, holds primary large-cap materials, industrial and consumer stocks and yields over 3%. With less than $6 million in total assets in the ETF, the herd has hardly returned to the Emerald Isle. One day they will.

—Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC.