The MSCI global emerging markets fell 2.7 in November due to monetary tightening in China, tensions on the Korean peninsula and the continuing European Union fiscal crisis. Despite this pullback, Citigroup’s global emerging markets equity strategist, Geoffrey Dennis, stated in a research report that it is a healthy sign of long-running bull market and that such pullbacks are typical for a bull market. According to him, none of the causes of the November decline are long-term threats to emerging markets (EM).
Dennis ran the screener to identify stocks to ride the next wave of the bull market in two categories: laggards with attractive growth rates and valuations and dividend-payers with strong balance sheets and attractive valuations. He also identified some stocks that investors can sell at current levels due to unattractive valuations and/or poor earnings outlooks.
- EM Laggards With Attractive Growth Rates and Valuations:
- EM Dividend-Payers With Strong Balance Sheet and Attractive Valuations:
- EM Stocks to Sell:
Shares of Brazilian oil-giant Petrobras (PBR) have lagged in recent months despite the rise in crude oil prices. Petrobras had a successful record share offering of some $70 billion at the end of September, which increased the total number of outstanding shares substantially.
Hon Hai Precision Industry Co. Ltd. (OTC:HNHAF) of Taiwan is better known as Foxconn (OTCPK:FXCNY) around the world. Foxconn is a contract manufacturer of computer equipment and other electronic gear for Dell (DELL), Apple (AAPL) and others. Foxconn was in the news earlier this year when a few of its factory workers in China committed suicide allegedly due to job stress.
Taiwan-based telecom services provider Chunghwa Telecom Co. Ltd. (CHT) has a dividend yield of over 4.0%.
Disclosure: Author long PBR