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Summary

  • The MSCI Emerging Markets Index had its fifth consecutive monthly advance in June.
  • Lackluster GDP growth in the US and the belief that interest rates won't rise soon have boosted emerging markets.
  • World economic growth appears to be finally stabilizing, after the global financial shock of the Great Recession.

The MSCI Emerging Markets Index - which tracks around 800 securities across Asia, Latin America, Africa and Eastern Europe - had its fifth consecutive monthly advance this June.

That's its longest winning streak since 2007. Much of the trading activity has to do with the United States, where lackluster GDP growth has many casting bets that an interest rate rise isn't coming anytime soon.

But the index also signals growing confidence in the direction of the world economy, despite the thorny political situations in Iraq and Ukraine. Thus far, oil prices have not been much affected by either conflict. Crude oil fell from a 10-month high earlier this month, following news that the conflict in Iraq hadn't reached the nation's oil-rich southern region.

With that in mind, we decided to screen emerging markets stocks for some stand-out names. To do that, we decided to look for stocks with winning streaks in Argentina, Brazil, China, India, Latin America, Russia and Greece - the emerging markets that all have the most ADRs, i.e. foreign stocks that trade on US exchanges.

Winning streaks happen when a particular stock outperforms a major gauge, usually the S&P 500. When a stock experiences a greater alpha than the S&P, and when this happens for multiple days, a stock is said to be on a winning streak.

Alpha is defined as the difference between a stock's actual return and what we would have predicted by the S&P. For instance, one of the stocks that made it through today's screen was China Cord Blood Corp. (NYSE:CO), with an average daily alpha of .99%.

This means it outperformed the market by about 1% over the given period. When we screened a universe of around 350 emerging market stocks, we were left with four that made it through this screen. Do you think they'll extend their streak? Use the list below to begin your analysis, and let us know what you think in the comments.

Click here for the full, interactive chart

1. Actions Semiconductor Co., Ltd. (NASDAQ:ACTS): Operates as a semiconductor company in the People's Republic of China. Market cap at $163.69M, most recent closing price at $2.39.

The stock's average daily alpha vs. the S&P 500 index stands at 1.04% (measured close to close, over the last month).

During this period, the longest winning streak lasted 15 days (i.e. the stock's daily returns outperformed the S&P 500 for 15 consecutive days).

The longest losing streak lasted one day (i.e. a win streak/losing streak ratio of 15).

2. China Cord Blood Corporation (CO): Operates as a cord blood bank in China. Market cap at $400.09M, most recent closing price at $5.48.

The stock's average daily alpha vs. the S&P 500 index stands at 0.99% (measured close to close, over the last month).

During this period, the longest winning streak lasted 6 days (i.e. the stock's daily returns outperformed the S&P 500 for 6 consecutive days).

The longest losing streak lasted 1 day (i.e. a win streak/losing streak ratio of 6).

Click here for the full, interactive chart

3. Edenor SA (NYSE:EDN): Engages in the distribution and sale of electricity in Argentina. Market cap at $324.08M, most recent closing price at $11.95.

The stock's average daily alpha vs. the S&P 500 index stands at 1.07% (measured close to close, over the last month).

During this period, the longest winning streak lasted 6 days (i.e. the stock's daily returns outperformed the S&P 500 for 6 consecutive days).

The longest losing streak lasted 2 days (i.e. a win streak/losing streak ratio of 3).

4. China Finance Online Co. Ltd. (NASDAQ:JRJC): Provides online financial and listed company data and information in the People's Republic of China. Market cap at $87.59M, most recent closing price at $3.94.

The stock's average daily alpha vs. the S&P 500 index stands at 0.99% (measured close to close, over the last month).

During this period, the longest winning streak lasted 7 days (i.e. the stock's daily returns outperformed the S&P 500 for 7 consecutive days).

The longest losing streak lasted 3 days (i.e. a win streak/losing streak ratio of 2.33).

Click here for the full, interactive chart

Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: 4 Emerging Markets Stocks On Winning Streaks