PIIGS nation may be transformed back into the "Celtic Tiger" it once was.

As the healthcare and technology hub of Europe, Irish stocks were some of the best performing European equities last year. Going forward, that trend should continue into the future as its high-tech economy is back in full swing. For investors looking for growth, often ignored Ireland could be their best play.

No More Bailouts

Before the Great Recession, data from investment bank Credit Suisse (NYSE:CS) showed that Ireland was actually the European Union's second wealthiest country in terms of GDP per capita. Unfortunately, major problems with the Irish financial system created a hyper-lending scenario that ultimately went bust as the global recession took hold. Irish real estate prices crashed and the nation had to take an €85 billion bailout from the International Monetary Fund and European Union. 

Well after three years, Ireland is finally back on track.

At the end of 2013, the nation was able to payback and emerge from underneath the bailout. Sky-high debts have been cut in half, joblessness has fallen, and business & consumer confidence has hit post-recession highs. And perhaps more importantly, GDP growth has once again returned. Overall, Ireland managed to expand its economy 0.3% in 2013, while estimations for 2014 and 2015’s GDP growth clock in at 1.7% in 2.5%, respectively.

The reason for this return to growth- aside from taking austerity measures in stride- has been the high-tech Irish economy.

Akin to Israel in the Middle East, Ireland has built its economic growth on becoming a technological and biomedical leader. Since the 1960’s, foreign companies have taken advantage of the nation's educated work force and lower corporate taxes. As such, Ireland is quickly becoming the biotech hub for all of Europe- with more than 170 companies in the pharmaceutical/chemical, biopharmaceuticals, medical devices and diagnostics industries within its borders. That number continues to grow as various economic incentive programs have made the nation a hot-bed of venture capital activity. 

All in all, the return to growth due to its high-tech economy helped push the Irish Stock Exchange upwards nearly 33% during 2013. 

Betting On The Emerald Isle

While the nation is still a work in progress, the recent successes point to a better picture for the high-tech economy. The Celtic Tiger is certainly roaring again and the broadest way to play it is through the iShares MSCI Ireland Capped (Nasdaq:EIRL).

The ETF spreads its $167 million in assets among 24 different Irish large- mid- and small-cap stocks. This includes the Bank of Ireland (NYSE:IRE) and sports book/gambling firm Paddy Power (OTCBB:PDYPF). Performance for the ETF has been amazing since the bail-out and returned a monster 47% last year. Expenses for the ETF run a relatively cheap 0.48%. Another broad bet on Ireland is the actively managed closed-end fund (CEF) –the New Ireland Fund (NYSE:IRL). IRL currently trades at 13% discount to its NAV

As we’ve mentioned before- biotech and healthcare is Ireland’s bread-n-butter. As such, the nation has a plethora of publicly traded drug firms. These include Alkermes (Nasdaq:ALKS) and Endo Health Solutions Inc. (Nasdaq:ENDP). However, two of the best could be Jazz Pharmaceuticals (Nasdaq:JAZZ) and Shire (Nasdaq:SHPG).

Aside from making the top selling ADHD drug Adderall- Shire has recently begun tackling more rare diseases and currently has drugs for ulcerative colitis and hereditary angioedema in its portfolio. Meanwhile, JAZZ has several lymphoblastic leukemia drugs in the works. These potential blockbusters should help propel JAZZ and SHPG higher. 

Just because Ireland has become a biotech leader, doesn’t mean it lacks a dose of industrial might as well. Diversified industrial giant Ingersoll-Rand (NYSE:IR) –along with its recent spin-off Allegion (Nasdaq:ALLE) –both are domiciled in the nation and have continued to see rising orders for its heavy machinery. Construction aggregate giant CRH (NYSE:CRH) has also seen rising revenues on the back of rising orders.

The Bottom Line

Ireland seems to be overcoming its fiscal woes as the nation’s tech story continues to drive its recovery and positive GDP growth. For investors, that could mean the time is right to snag-up shares of Irish stocks. The previous Irish picks- along with airplane leasing firm FLY Leasing Limited (NYSE:FLY)- make ideal buys.