Ahold And 4 Other Non-U.S. Stock Buys

Ahold And 4 Other Non-U.S. Stock Buys

Most economists are predicting a US recession in 2023. No one is good at predicting the future, but the looming recession could be a reason to consider adding some non-US stocks to your portfolio.

Here are five foreign stocks I like right now. All of them are traded in the US, either through direct listing or through American Depositary Receipts (ADRs).

in japan, Itochu (ITOCF) deserves attention. It is an import-export company dealing in the trade of textiles, machinery and many other industries. Over the past decade, it’s grown its sales by about 12% annually and its profits by about 11%.

Warren Buffett, nicknamed the Oracle of Omaha, announced in August 2020 that his company, Berkshire Hathaway, had acquired a 5% stake in Itochu and its four leading competitors. Berkshire increased its stake later that year. Typically, Buffett has bought in cheap, and he’s already made a handsome profit.

In my view, the stock is still attractively priced, selling for less than 8 times earnings and 0.5 times sales.

I like in the Netherlands Koninklijke Ahold Delhaize NV (ADRNY), often known as Ahold. It is the largest supermarket chain in the Netherlands and Belgium and the fourth largest in the US. Its US brands include Stop & Shop, Hannover and Food Lion). It has more than 7,000 stores in 11 countries.

Over the past year, Ahold’s shares have fallen about 10% despite increases in revenue and earnings. The stock looks attractive to me at 11 times earnings and 0.32 times sales.

And, uh, the dividend. The yield is 3.5%, and the company doesn’t bother paying it since it pays out less than half of its profits in dividends. The dividend growth rate over the past five years is about 12%.

In France I prefer Total Energies SE (TTE) The plural of “energy” was chosen deliberately. Total is the largest oil company in France, but it’s also serious about solar and wind power, with major projects in both.

As with Ahold, the dividend is attractive and the proportion of profits distributed is moderate. Overall, this results in a dividend yield of 4.5%. However, the dividend growth rate over the past five years is sluggish at 1.5%.

After years of stock price stagnation, Total shares are down 11% over the past year while the U.S. stock market has fallen.

A small-cap stock that interests me Aurubis AG (AIAGY), based in Germany. It is a copper recycler that has wildly fluctuating revenues from year to year. Gains have been strong of late, but investors are not confident the good times will continue. As a result, the stock is selling for just six times earnings.

Demand for copper is highly cyclical, so whether you want this stock will depend in part on your economic outlook. Economists agree that real economic growth in Europe will only be a fraction of a percent.

I assume that Europe will do slightly better than consensus expects and that Aurubis will have a good year.

Xi Jinping now rules China as an absolute autocrat. In recent years it has become more Western and anti-capitalist. I worry about expropriation and probably won’t invest in China in 2023.

If political risk bothers you less than I do, some Chinese stocks are attractively valued. one is China Yongda Automobiles Services Holdings Ltd. (CYYHF). It sells luxury cars like BMW, Bentley and Jaguar. She also rents, maintains and finances cars.

China Yongda has been consistently profitable, and often very profitable. However, there is a regulatory risk as the Chinese government favors Chinese-made cars and may see luxury cars as symbols of capitalist elites.

past record

This is the 19thth Column I wrote to recommend some non-US stocks. The average annual return for the previous 18 columns was 14.8%, compared to 13.6% for the Standard & Poor’s 500 Total Return Index over the same periods. That’s a slim margin, but a margin nonetheless.

International investments involve risks. Disclosure standards abroad are generally more relaxed than in the United States, regulation is often less stringent, economic volatility is often greater, and currency fluctuations can sometimes wipe out profits.

Also, US investors are likely to know US companies better than foreign companies.

However, there is also a big benefit. As you consider a broader range of potential investments, you might stumble upon some great companies that other people overlook.

Disclosure: I own Total Energies personally and for most of my clients.

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