It's no surprise that international stocks have gained popularity with investors over the past few years. They've generated absolutely amazing growth.
For the past six years in a row, the Vanguard Total International Stock Market Index outpaced the Vanguard Total Stock Market Index. The latter tracks just the broad U.S. market, including top holdings in Cisco Systems and General Electric.
Even though foreign markets probably won't outperform U.S. markets every year, international stocks are undeniably worth your time to research. And thanks to American depositary receipts (ADRs), U.S. investors have more opportunities than ever to trade foreign securities on domestic exchanges.
This month's best performances
Foreign companies that participate in an ADR program must file reports in accordance with U.S. regulations, but their corporate cultures and business decisions can seem unorthodox to American investors.
To help us understand this month's top-performing ADRs, we'll tap the expertise of the more than 110,000 members participating in Motley Fool CAPS, the Fool's free investing community. Here are the top four performers over the past month among ADRs, along with their ratings from the CAPS community.
|
Company
|
Country
|
1-Month
% Change
|
CAPS Rating
(out of 5)
|
|
Randgold Resources (Nasdaq: GOLD)
|
Channel Islands
|
27.6%
|
***
|
|
WuXiPharmaTech (NYSE: WX)
|
China
|
25.1%
|
*****
|
|
The9 Limited (Nasdaq: NCTY)
|
China
|
19.7%
|
*****
|
|
Xinhua Finance Media (Nasdaq: XFML)
|
China
|
18.1%
|
**
|
Data provided by Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS as of July 21; screen excludes companies with market caps of less than $100 million.
Remember, I chose these stocks as jumping-off points for further research, not as formal recommendations. That said, checking out stocks with CAPS's four- and five-star ratings is an effective tool for investors.
Why they rallied
Randgold: As the saying goes, "A rising tide lifts all boats," and a recent rebound in gold prices certainly hasn't hurt Randgold. Over the past month, the gold-tracking SPDR Gold Shares (NYSE: GLD) ETF has gained 7%. Despite its recent performance, CAPS members are a tad skeptical of Rangold's prospects and still rate it a mediocre three stars.
WuXi: The Chinese pharmaceutical research and development outsourcer won a big contract from U.S.-based Covance (NYSE: CVD) providing the stock with a much-needed boost. Over on CAPS, 81 of the 85 All-Star members who have rated the stock think it will outperform the S&P 500 going forward.
The9 Limited: Online gaming, specifically massively multiplayer online role-playing games (MMORPGs) such as Activision Blizzard's (Nasdaq: ATVID) wildly popular World of Warcraft, are not only huge in the U.S., but in China as well. The9 is licensed to distribute World of Warcraft and similar online games in China. Earlier this month, The9 entered into a joint venture with Korean game developer T3 Entertainment which provided some encouraging news to investors in the beaten-down stock.
Xinhua Finance Media: It's been a rough go for Xinhua Finance since its IPO; the stock presently sits some 80% off its March 2007 offer price. News of fresh insider buying at depressed prices back in late June briefly provided some confidence to investors. CAPS members still aren't convinced, and XF retains its lowly two-star rating.
What do you think?
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