More than half of the world's total market cap now sits outside the United States. The largest IPO in history now belongs to a Chinese bank, ICBC, though this distinction could be temporary, depending on how Japan proceeds with its postal savings bank. Either way, it means that many of the world's most established and dynamic growth opportunities are not American companies.
Scouring the globe for value
Successful international investing requires many of the same skills needed to evaluate a U.S. company. In addition to understanding a business's fundamentals, international investing requires Fools to familiarize themselves with some of the things we take for granted here in the U.S., including economic policy, political currents, corporate governance, accounting standards, and the cultural factors at work in different countries. In our recently launched Motley Fool Global Gains service, we account for these factors and others in our global search for the most attractive opportunities.
I don't have a handful of thoroughly researched ideas to offer you here, but I am having fun mining our new Motley Fool CAPS service for other investors' opinions. If you haven't heard of it, CAPS is a community intelligence database that asks investors to rate stocks. In turn, every investor is ranked, as is every stock. As more people participate, and more time passes, we hope to find the best investor and the best stock in America -- and, potentially, the world. (Admittedly, we'll have to roll this thing out of beta-testing before we can start talking about global domination.)
Six all-star foreign companies
The following three stocks all have been recommended by at least 10 CAPS participants, have a P/E below 20, a market cap of more than $10 billion, and are rated as five-star picks (the highest possible) by the CAPS community. As you'll see, the list includes some easily recognizable names.
|
Company |
PE |
Market Cap | |
|---|---|---|---|
|
Novartis (NYSE:NVS) |
17.9 |
$131.2 billion | |
|
Companhia Vale do Rio Doce (NYSE:RIO) |
14.1 |
$101.7 billion | |
|
Eni SpA (NYSE:E) |
4.2 |
$51.6 billion |
The following three companies have all the same qualities as the firms listed above, but these stocks have market caps of less than $10 billion. As you might expect, these companies aren't exactly household names.
|
Company |
PE |
Market Cap |
|---|---|---|
|
Penn West Energy Trust (NYSE:PWE) |
13.5 |
$8.3 billion |
|
Aracruz Celulose (NYSE:ARA) |
12.8 |
$6.1 billion |
|
Companhia Paranaense de Energia (NYSE:ELP) |
5.2 |
$3.6 billion |
In CAPS, you'll also find ratings on all of the exchange-traded funds that track the global markets. In some cases, it's easiest to gain exposure to the United Kingdom's economy, for example, with the iShares MSCI United Kingdom Index (AMEX:EWU) ETF.
When you go digging for the world's best stock ideas in a volatile market, it's still crucial to do your due diligence. If you'd like to get started doing just that, come and see what our CAPS investors are actually saying about these companies. To do so, just follow the link to join the free beta test of CAPS today.
Global Gains lead analyst Bill Mann departs for China, India, and Taiwan on June 2 in search of new investment opportunities in some of the world's fastest-growing economies. Get updates and analysis live from the field by sending Bill an email at [email protected].
Nathan Parmelee is a contributing analyst to Global Gains and is ranked No. 188 out of 29,272 rated investors in CAPS. At the time of publication, Nathan had no financial interest in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.
