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Summary

  • The MSCI Emerging Markets Index has fallen for 5 straight days.
  • Better-than-expected data from the US will pressure the Federal Reserve to taper its asset purchasing.
  • Emerging market equities and bonds will suffer, which may create buying opportunities for value investors.

The MSCI Emerging Markets Index has fallen for 5 straight days - mostly over good news from the United States - where consumer prices rose more than expected.

Behind the decline are concerns that the better-than-expected data from the US will pressure the Federal Reserve to taper its asset purchasing more quickly than investors previously expected.

If the US government purchases fewer assets, it will decrease the attractiveness of emerging market equities and bonds.

With that in mind, we decided to screen emerging market stocks for buying opportunities amidst the sell-off. To do that we constructed a universe of emerging market stocks based in India, Taiwan, Turkey, Latin America and South Africa.

Based on that initial universe of about 150 companies, all of which trade on American exchanges, we screened for undervalued companies by looking for mismatches between earnings per share growth and price growth. This indicates the company is adding earnings that the market may not have accounted for in its price.

Click here for the full, interactive chart.

1. Empresas ICA, S.A.B. de C.V. (NYSE:ICA): Engages in the construction and related activities in Mexico. Market cap at $1.22B, most recent closing price at $8.06.

The EPS estimate for the company's current year increased from 0.5 to 0.65 over the last 30 days, an increase of 30%.

This increase came during a time when the stock price changed by 8.48% (from 7.43 to 8.06 over the last 30 days).

2. Petroleo Brasileiro (NYSE:PBR): Engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. Based in Brazil. Market cap at $107.58B, most recent closing price at $15.87.

The EPS estimate for the company's current year increased from 1.73 to 1.93 over the last 30 days, an increase of 11.56%.

This increase came during a time when the stock price changed by 3.86% (from 15.28 to 15.87 over the last 30 days).

Click here for the full, interactive chart.

3. Grupo Televisa, S.A.B. (NYSE:TV): Operates as a media company in Mexico and internationally. Market cap at $21.31B, most recent closing price at $34.33.

The EPS estimate for the company's current year increased from 1.04 to 1.19 over the last 30 days, an increase of 14.42%.

This increase came during a time when the stock price changed by 2.17% (from 33.6 to 34.33 over the last 30 days).

4. AU Optronics Corp. (NYSE:AUO): Develops, produces, and sells thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays to original equipment manufacturing service providers. Based in Taiwan. Market cap at $3.84B, most recent closing price at $3.90.

The EPS estimate for the company's current year increased from 0.21 to 0.26 over the last 30 days, an increase of 23.81%.

This increase came during a time when the stock price changed by 5.41% (from 3.7 to 3.9 over the last 30 days).

Click here for the full, interactive chart.

Source: Does A 5-Day Slide Make These Undervalued Emerging Market Stocks Attractive?