This article highlights the worst performing foreign stocks year to date 2019 through data as of May 21. The YCharts equity screening tool database counts 2,384 foreign stocks that either trades as an American Depository Receipt "ADRs," is primarily listed on a U.S. exchange, or is a foreign issuer with over-the-counter shares "OTC." Narrowing through the following filters, the list becomes a more manageable 503 stocks.
- Market cap above $10 billion.
- Exclude stocks with less than $100,000 average daily trading volume value over the past 30 days.
- Exclude stocks that are the secondary and less liquid shares class of the same company.
An analysis of the large-cap foreign stocks' returns draws some interesting insight into the current themes driving equity prices across the globe. It's important to note that this list is not meant to be all-inclusive. Given the size of the original data set, it's likely some stocks were missed or incorrectly categorized. It's also worth noting that there are many large cap stocks globally that are simply not traded on a U.S. exchange.
Stock Screen Results. data ycharts.com/ table author
The data shows that the average return for the group is 11.4% YTD. Japan leads the list by country represented with 75 stocks, a position that is consistent with the size of the country and advanced development of their financial market. 58 Canadian stocks are also included as the second most represented country followed by China with 68. Chinese companies with subsidiaries incorporated or headquartered in the Cayman Islands or Bermuda are reclassified as China for presentation purposes. The global multinational nature of firms makes it so the home country is not always relevant to identify major areas of operation. The top and bottom 30 best performers are presented below.
Best Performing Foreign Large Cap Stocks
Singapore's internet conglomerate Sea Limited (NASDAQ:SE) is the best performing foreign stock YTD up 124%. At the time of writing, the stock has surged on an earnings beat with 127% year over year. The company has signed an exclusive long-term publishing partnership contract with Tencent (OTCPK:TCEHY) to publish mobile and PC games across Southeast Asia and Taiwan.
The biggest winners are a diverse group across a number of industries although tech and internet are a recurring theme. Canada's Shopify Inc. (NASDAQ:SHOP), Argentina's MercadoLibre Inc. (NYSE:MELI), and Brazil's PagSeguro Digitial Ltd. (NYSE:PAGS) are all involved with fin-tech type payments solutions reporting impressive growth which has been rewarded by higher share prices. The three are up 96%, 94% and 64% YTD each respectively.
China's online travel agency Ctrip.com International Ltd. (NASDAQ:CTRP), and online retailer JD.com Inc. (NASDAQ:JD) have largely bucked any trade war uncertainty or concerns of slowing growth in the country with shares around 40% in 2019.
Also on the list are two Canadian cannabis stocks Aurora Cannabis Inc. (NYSE:ACB) and Canopy Growth Corp. (NYSE:CGC) both up near 70% YTD. Legalized marijuana in Canada along with trends moving in that direction across the United States suggest the emerging cannabis sector will remain an exciting part of the market for the foreseeable future.
Worst Performing Large Cap Foreign Stocks
Bottom 30 Performing Foreign Stocks. data ycharts.com/ table author
At the bottom end of the list the 30 worst performing foreign stocks are largely distressed for various company-specific reasons. These stocks have significantly underperformed global financial markets that have rallied this year despite the current volatility amid renewed U.S.-China trade dispute concerns.
Korean Electric Power Corp. (NYSE:KEP) is the worst performer down 29% YTD largely related to the country's weaker than expected economic performance suggesting emerging signs of a cyclical slowdown.
Denmark's Danske Bank A/S (OTCPK:DNKEY) and Swedish bank Swedbank AB (OTCPK:SWDBY) are each down 12% and 26% YTD respectively in part due to an ongoing international fraud investigation with transfers between the two banks raising suspicion of violating AFC (Anti-Financial Crime) regulations. The two banks are cooperating.
It's been a difficult year for Brazil's iron ore mining giant Vale SA (NYSE:VALE). The company was involved in a devastating and tragic mining dam collapse in Q1 which led to sharp declines in its stock price during that period. More recently, weakness has emerged from both a pullback in iron ore prices globally amid uncertainty from Chinese demand and poor economic data out of Brazil.
China's search engine Baidu Inc. (NYSE:BIDU) reported a weak Q1 result and guided lower for the rest of the year sending shares down over 20% on the report. The loss in the quarter was the company's first since 2005 and spooked the market adding to concerns over the strength of the Chinese economy.
The lists above may serve as a good starting point to further research new investment and trade ideas. The ongoing trade dispute between the U.S. and China along with growing uncertainty of trends in global growth suggest investors should monitor both developments closely. The implication of a deeper than expected slowdown in the Chinese economy has negative implications across global financial markets. On the other hand, a faster than expected resolution to the trade war saga should help support investor confidence that could add to a bullish environment for equities.
Investors should also be aware that foreign stocks carry the added risk of currency fluctuations with exposure to the exchange rate of the U.S. Dollar and the local currency. Overall, we can look forward to an exciting second half of the year. Good luck.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.