These Stocks Beat Canadian Stocks

On some market days, news headlines are dominated by individual stocks whose shares have soared over the past year. Other times, investors are bombarded with statistics of how an entire group of stocks -- from a country, sector, or industry -- has outpaced the general market.

Canadian stocks are one such group that has certainly had its share of the spotlight lately, thanks in part to monster stocks such as Research In Motion (Nasdaq: RIMM  ) and Fording Canadian Coal Trust (NYSE: FDG  ) .

But I can tell you tales of companies from another region beating the pants off of Canadian stocks ... and where you can find out more about them.

Would the real hot stocks please come forward
By using Motley Fool CAPS, investors can get detailed information and community intelligence on not only individual stocks but also entire sectors, regions, and industries.

Any of the 5,200 rated stocks that are profiled in CAPS can be "tagged" with a descriptor that groups the company with others that share a certain quality, such as a country of origin, sector, or industry. A single click on the "Canada" tag pulls up a list of 43 Canadian stocks that -- as a group -- have risen an impressive 20% in the past year.

Using the tags in CAPS can lead you to a group of stocks in another region that has more than doubled the return of stocks in the Canada group -- Brazil. The 27 companies under the Brazil tag have risen a whopping 50% in the past year. Granted, there's far fewer companies making up this group, and the reasons behind the dramatic growth could be quite different. Thankfully, CAPS can help us dig under the surface.

From macro to micro
Tag groups can be sorted quickly by their CAPS ratings, denoted by one to five stars, with five being the best. Then individual companies can be viewed to show details of just who -- from Wall Street to Main Street -- is bullish or bearish on the company and why. For instance, here are a few of the highest-rated stocks in the Canada group and their individual performances in the past year.

Company

CAPS Rating
(out of 5)

One-Year Performance

Suncor Energy (NYSE:SU)

*****

32.8%

Brookfield Asset Management (NYSE:BAM)

*****

6.3%

Cameco (NYSE:CCJ)

*****

15.3%

Source: Yahoo! Finance and Motley Fool CAPS, as of Nov. 21.

Similarly, here's a sampling of Brazil-tagged stocks that -- judging by interest in the CAPS community -- investors may want to consider:

Company

CAPS Rating

One-Year Performance

Companhia Vale do Rio Doce (NYSE:RIO)

*****

141.5%

Brasil Telecom

*****

82.7%

Gerdau (NYSE:GGB)

*****

77.3%

Banco Itau

****

40.1%

Source: Yahoo! Finance and Motley Fool CAPS, as of Nov. 21.

Consistently rated as one of South America's best stocks, Brazilian steel producer Gerdau has been rapidly expanding production to meet worldwide demand for various grades of steel. Consistently strong earnings and a rising stock price have allowed the company to leverage its own business and acquire several other companies producing steel and related products, including Chaparral in July and a recently announced deal for Quanex.

Gerdau's strategy -- comprised of organic growth and smart acquisitions -- has so far proven successful, with a stock that's risen more than 16 times in value over the past five years. Most CAPS investors see the trend continuing, as 99% of the investors rating the company as of today are bullish.

It also makes sense that the economic growth in Brazil -- and several other Latin American countries -- will flow through banks and financial firms. Diversified financial services bank Banco Itau has been collecting service fees and interest on the booming growth in South America, currently serving retail customers from nearly 3,500 branches. The company also collects on more than 13.8 million credit cards.

More than 95% of CAPS investors who weighed in with an opinion are sticking to what works here too, voting for the company to beat the S&P going forward.

Before you buy ...
Of course, investors don't want to be looking in the rear-view mirror to find out where they should be investing now. But the underlying reasons behind dramatic run-ups in stocks or groups of stocks can clarify macroeconomic trends that may significantly affect investments. 

No matter where investing ideas come from, investors should always perform their own due diligence and not follow crowds or individual recommendations.  


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