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 sixth year in a row, the Vanguard Total International Stock Market Index outpaced the Vanguard Total Stock Market Index, which tracks the broad U.S. market and includes top holdings in Chevron (NYSE: CVX ) , IBM, and Schlumberger (NYSE: SLB ) .
Foreign markets probably won't outperform U.S. markets forever, and international stocks are undeniably worth your time in 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 and accounting standards. Their different corporate cultures and business decisions can seem unorthodox for American investors.
To help us understand this month's top-performing ADRs, we've tapped the expertise of more than 83,000 investors participating in Motley Fool CAPS, the Fool's free investing community. Here are this past month's top ADRs.
|
Company
|
% Change
|
CAPS Rating
(Out of 5)
|
|
IONA Technologies (:IONA)
|
45.7%
|
***
|
|
Highveld Steel and Vanadium (NASDAQ:HSVLY)
|
43.7%
|
*****
|
|
GPC Biotech
|
33.5%
|
*
|
|
Companhia Siderurgica Nacional (NYSE:SID)
|
32.7%
|
****
|
|
Corporate Express N.V.
|
31.5%
|
NR
|
Data provided by Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS; screen excludes companies with below $100 million. NR = not rated.
Remember, I chose these stocks to be jumping-off points for further research, not formal recommendations. That said, CAPS four- and five-star ratings for stocks such as these are an effective tool for investors.
Steel barons
It's been a great year for steel. The Market Vectors Steel ETF is up 62% since this time last February, and individual steel producers such as CVRD (NYSE: RIO ) and Rio Tinto (NYSE: RTP ) are both up more than 85% for the period. Two of this month's top ADRs -- South African Highveld Steel and Vanadium, and Brazil's Companhia Siderurgica Nacional (CSN) -- have not been exceptions to the trend. In the course of the year, the stocks have gained 59% and 200%, respectively.
As you might imagine, CAPS investors are largely taken with Highveld Steel and CSN. Of the two, Highveld gets a tad more love from CAPS investors. Among the 132 players who've rated the stock, 130 think it will continue to outperform the S&P 500 going forward. In general, CAPS investors like Highveld's solid dividend yield (3.6%), low P/E (11.6x), and the high global demand for steel.
This pitch from Uncommonsense sums it up nicely:
Global demand for steel is huge plus the industry is in the process of a major consolidation and this company is a perfect target for acquisition. Great dividend, low PE, decent growth ... everything a value player could possibly want.
Income-minded investors, however, should be aware that the company's dividend policy is under review by its controlling shareholder, Russian steel titan Evraz. According to Highveld's most recent report (June 2007), Evraz was reviewing the company's "cash requirements covering capital and environmental expenditure" and thus did not pay its usual interim dividend.
Solid bearish opinions on steel are hard to find on CAPS, with the possible exception of this one from Stockefeller, who thought CSN was overbought two weeks ago. "Book value of $19 ... trading near $100. Technically overbought. Timberrrrrrrrrrrrrr!"
I should note that this comment was made before a 3-for-1 split, but Stockefeller's argument is still worth noting -- CSN currently trades with a book value of $6.36 per share, and shares are trading around $38. Are would-be steel investors already too late to get into the game?
What do you think about steel stocks, or any stock for that matter? Make your voice heard on Motley Fool CAPS. It's 100% free, so sign up today!
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