Look outside the U.S. for investing opportunities.
Just as U.S. markets have been volatile so far in 2022, many other corners of the world have also seen plenty of red ink. However, it’s important to remember that in the long-run there is value in geographic diversification. Sometimes when major domestic investments hit a snag, there are pockets of strength that can be found elsewhere in the world. The following seven stocks are all proof of that emerging market stocks can offer gains right now despite a challenging market environment in the developed world. Here are some top stock picks in overseas markets.
Credicorp Ltd. (ticker: BAP)
Credicorp is a Peru-based financial service company that offers various banking, insurance and pension services. What makes BAP particularly interesting, however, is the company’s microfinance segment that manages loans, credits, deposits and accounts for small businesses across Latin America. Despite being located in a developing economy, the company has deep roots. It was founded way back in 1889 and has an extensive network of customers in the region to help provide a steady stream of cash, and potential upside as the local economy grows and thrives.
Gold Fields Ltd. (GFI)
Gold Fields is a company that profits from exactly what you think — gold reserves! The miner is headquartered in South Africa, but has reserves in Chile, South Africa, West Africa, Australia and Peru. The company also explores for copper deposits, which tend to exist in nature alongside gold. GFI is valued at roughly $15 billion, and holds interests in nine operating mines with an annual gold-equivalent production of approximately 2.24 million ounces. As investors likely know, the current inflationary price environment has lifted gold even while the stock market has struggled, so GFI has done remarkably well with returns of more than 40% year to date in 2022 in addition to a roughly 2% dividend yield.
Nutrien Ltd. (NTR)
Nutrien is an agricultural products company that offers crop inputs and services through about 2,000 retail sales locations worldwide, from its native Canada down through the U.S. to South America, as well as in Australia. It primarily offers potash, nitrogen, phosphate and sulfate products as well as financial solutions for farmers to help plan their planting and fertilizing expenses. While many products and services wax and wane based on global economic trends, it’s highly unlikely we’ll see major disruptions in farming and food production considering the growing world population. That means most farms are always trying to maximize yield through fertilizers, and creating a reliable stream of revenue for NTR as a result.
Sociedad Quimica y Minera de Chile SA (SQM)
Materials company Sociedad Química y Minera de Chile SA — which means the “Chemical and Mining Society of Chile” in English — specializes in plant nutrients, including potassium for fertilizer and other agricultural products, as well as iodine for medical uses and lithium for electronics and high-tech batteries. This operation is diversified, but fundamentally benefits from a general trend in rising materials costs as well as rising industrial demand. It all adds up to a nice tail wind for operations that has resulted in a roughly 50% gain year to date in 2022.
Teck Resources Ltd. (TECK)
Teck engages in natural resource mining in Asia, Europe and North America. It produces coal that provides the carbon required for steelmaking, as well as copper, zinc, lead and other metals. It also produces chemicals, fertilizers and even energy products. As with other stocks in this list, TECK stock has benefited from inflationary pressures. And thanks to that uptrend lifting various elements of its business, shares have tacked on more than 30% so far this year.
Telefonica Brasil SA (VIV)
Telefonica Brazil is a $17 billion telecom provider that offers mobile and landline connections to residential and corporate customers in Brazil. In addition, it provides pay TV services and high-speed internet as well as IT support to various industries that range from retailers to manufacturing to financial institutions and even the government. Telecom is one of the most reliable industries in the 21st century since it’s crucial to businesses and consumers alike, but VIV stock also has the opportunity to grow with the local economy. As a result, this stock has jumped 25% this year, even amid challenges elsewhere.
Vale SA (VALE)
This Brazil-based megaminer is primarily an iron producer, but also extracts other metals including nickel and copper as well as byproducts of other mining operations that include gold, silver and other precious metals. When you’re roughly $90 billion in size and operate globally, it pays to make the most of all the resources you dig up, and VALE is a good example of that philosophy. While the most apparent signs of inflation have come at the gas pump, the reality of rising prices in 2022 is that a host of raw materials are more expensive now than they were a year ago — and the diversified mining operations of VALE have been lifted across the board as a result. Shares are up more than 35% so far this year.
Seven of the best emerging market stocks to buy:
— Credicorp Ltd. (BAP)
— Gold Fields Ltd. (GFI)
— Nutrien Ltd. (NTR)
— Sociedad Quimica y Minera de Chile SA (SQM)
— Teck Resources Ltd. (TECK)
— Telefonica Brasil SA (VIV)
— Vale SA (VALE)
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7 of the Best Emerging Market Stocks to Buy originally appeared on usnews.com
