In this article, we discuss 5 best foreign stocks to buy now. If you want to see more best foreign stocks to buy, the risk/reward, and methodology of this list, go directly to 10 Best Foreign Stocks to Buy Now.
5. HDFC Bank Limited (NYSE:HDB)
Number of Hedge Fund Holders: 36
HDFC Bank Limited (NYSE:HDB) ranks #5 on our list of 10 Best Foreign Stocks to Buy Now given 36 hedge funds we track owned shares of the leading Indian bank at the end of the third quarter. With India’s economic growth and the bank’s strong businesses, shares of HDFC Bank Limited (NYSE:HDB) have more than tripled from 2012 and could have more long term upside if the bank maintains its market share in India’s banking market. Despite macroeconomic headwinds, shares of HDFC Bank Limited (NYSE:HDB) have rallied 4.81% year to date.
4. Canadian Pacific Railway Limited (NYSE:CP)
Number of Hedge Fund Holders: 41
Canadian Pacific Railway Limited (NYSE:CP) is a leading Canadian railroad whose stock price has rallied from around $14 at the beginning of 2012 to $82.35 as of December 4. Billionaire Bill Ackman commented on Canadian Pacific Railway Limited (NYSE:CP) in a June 2022 investor letter,
CP is a high-quality, inflation-protected business led by a best-in-class management team that operates in an oligopolistic industry with significant barriers to entry. With an improving volume and pricing outlook combined with the upcoming transformational acquisition of Kansas City Southern (“KCS”), we believe that CP’s prospects are bright.
CP reported revenue growth of 7% in the second quarter as pricing and mix, fuel surcharge pass-throughs and foreign exchange more than offset a small decline in volumes. CP is leveraging the strong pricing environment to renew contracts at an average price increase of over 6%. Pricing directly benefits earnings as rails pass on increases in fuel and other expenses to customers through contractual fuel surcharges and CPI escalators. In addition to earnings growth, high inflation should help rail transportation take share from trucking and lead to incremental volume growth over time. Customers are choosing cheaper transportation solutions as prices rise, and CP’s mission-critical rail service is often the cheapest or only viable method for transporting heavy freight over long distances. High fuel prices and wage gains also disproportionally increase the cost of trucking, which is up to three times less fuel efficient and much more labor intensive than rail transportation.
Canadian Pacific Railway Limited (NYSE:CP) shares are up 14.5% year to date in 2022.
3. Canadian National Railway Company (NYSE:CNI)
Number of Hedge Fund Holders: 42
Canadian National Railway Company (NYSE:CNI) shares have more than tripled from the beginning of 2012 given strong earnings growth. Despite the high inflation, demand for railroads is strong as the Association of American Railroads reported that North American rail traffic rose 2.4% year over year for the week ending November 26. Recently, the U.S. government also passed a bill that averted a potential rail strike that could have affected Canadian National Railway Company (NYSE:CNI). 42 hedge funds in our database owned shares of Canadian National Railway Company (NYSE:CNI) at the end of the third quarter, ranking the Canadian company #3 on our list of 10 Best Foreign Stocks to Buy Now.
2. AstraZeneca plc (NASDAQ:AZN)
Number of Hedge Fund Holders: 44
AstraZeneca plc (NASDAQ:AZN) shares have rallied 17.6% year to date and are near all time highs as analysts expect more earnings growth for the British pharmaceutical giant. In terms of EPS estimates, analysts expect AstraZeneca plc (NASDAQ:AZN) to earn $3.32 per share for 2022, $3.69 per share for 2023, and $4.37 per share for 2024. If AstraZeneca plc (NASDAQ:AZN) continues innovating successfully, AstraZeneca plc (NASDAQ:AZN) could earn even more in the long term. 44 hedge funds in our database owned shares of AstraZeneca plc (NASDAQ:AZN) at the end of September.
1. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 51
ASML Holding N.V. (NASDAQ:ASML) ranks #1 on our list of 10 Best Foreign Stocks to Buy Now given 51 hedge funds in our database held shares in the leading Dutch semiconductor company. ASML Holding N.V. (NASDAQ:ASML) shares have rallied more than 10x since the beginning of 2012 thanks to strong EPS growth. Given the substantial future expected growth in semiconductors and little expected competition in terms of its sector for at least another decade, analysts expect ASML Holding N.V. (NASDAQ:ASML) to continue to grow earnings per share in the future although potential geopolitical issues between China and the United States could eventually lead to some volatility along the way.
Baron Opportunity Fund commented on ASML Holding N.V. (NASDAQ:ASML) in a Q2 2022 investor letter,
ASML Holding N.V. designs and manufactures semiconductor production equipment. It specializes in photolithography equipment, where light sources are used to photo-reactively create patterns on wafers that become printed circuits. ASML is the dominant leader across all types of lithography but, most importantly, is the only company selling equipment for extreme ultra-violet (EUV) lithography, the latest generation technology.
Indeed, because of the stalling out of Moore’s Law, advanced lithography of larger and multi-patterned silicon chips has been critical for leading-edge chip manufacturing and continued improvement in semiconductor chip performance over time. The company is well positioned to continue growing above industry rates as it rapidly adds capacity across its entire business to meet rising industry demand, especially from leading-edge customers continuing to invest to stay ahead of their competitors and drive chip performance forward.
Additionally, the introduction of high-NA EUV technology in the middle of the decade will add another leg to the growth opportunity.
You can also take a look at 15 Biggest Banks In The World and Ken Griffin Stock Portfolio: Top 10 Stock Picks.
