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Are Large Cap Foreign Stocks Cheap?

Tracey Ryniec
  • (0:30) - Finding Cheap Large Cap Stocks
  • (4:10) - Tracey’s Top Stock Picks
  • (11:50) - Episode Roundup: BAK, BMO, CRRFY, TI, GELYY
  •                 Podcast@zacks.com

Welcome to Episode #135 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

The large caps stocks are still the hot stocks on the stock market.

But what about the international large cap stocks?

With worries about global growth increasing, are there bargains to be had for investors outside of the United States?

Screening for Large Cap Value Stocks

It’s easy to do a screen of large cap value stocks and then narrow the list to international stocks from there.

This screen is a basic one with just 4 criteria.

For value, it included a P/E under 15. The market cap had to be over $10 billion.

It also included the Zacks Ranks of #1 (Strong Buy) and #2 (Buy) which should provide rising earnings estimates.

The screen returned 74 stocks including big banks, insurers, retailers and a good selection of foreign stocks.

5 Cheap Large Cap Foreign Stocks

No one should be investing off a simple screen. Always do your research on the companies you buy.

These 5 stocks show you why that’s so important.

1.       Braskem BAK is a Brazilian petrochemical company. While it looks cheap in the screen, with a forward P/E of 11.4, it also hasn’t filed its 2017 20F with the SEC and is trying to sell itself to an American company. There are risks in all investing, but especially in foreign companies where there may be less information. Be sure to do your research.

2.       Bank of Montreal BMO has a market cap of $48.3 billion. It has a forward P/e of just 10.3 and pays a healthy dividend currently yielding 4%. Earnings are expected to rise 4.5% in fiscal 2019.

3.       Carrefour CRRFY is a large French retailer which operates supermarkets in 30 countries. Over the last year, the shares have fallen 6.2%. It has a P/S ratio of just 0.2. It also pays a dividend, yielding 2.8%.

4.       Telecom Italia TI has seen its shares pummeled over the last year, falling 35.4%. It’s cheap, though, with a forward P/E of 7.9. However, you won’t get a dividend for your troubles.

5.       Geely Auto GELYY is the China stock on this list, but be aware that it’s incorporated in the Cayman Islands. Over the last year, shares are down 37.3%. Additionally, auto sales were weak to end 2018 and remained so to start 2019. But with a forward P/E of 8.4, maybe it’s time to be a contrarian investor?

What else should you know about the risks and rewards of large cap foreign stocks?

Listen to this week’s podcast to find out.

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Telecom Italia S.P.A. (TI) : Free Stock Analysis Report
Geely Automobile Holdings Ltd. (GELYY) : Free Stock Analysis Report
Bank Of Montreal (BMO) : Free Stock Analysis Report
Braskem S.A. (BAK) : Free Stock Analysis Report
Carrefour SA (CRRFY) : Free Stock Analysis Report
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