In this article, we will look at the 9 Most Undervalued Foreign Stocks to Buy Now.
On May 20, Alastair Pinder, Head EM and Global Equity Strategist at HSBC appeared on a CNBC Television interview. Pinder focuses on emerging markets such as those in Latin America. He is particularly overweight on the Brazilian Market and believes that higher inflation and commodity prices are a positive sign for emerging markets such as Brazil, because surging prices for crude oil, iron ore, and agriculture drastically boost corporate profits and government revenue.
Pinder also highlighted that emerging markets are also one of the key beneficiaries of AI and tech. He noted that DRAM and semiconductors are also commodities and the recent price hike in memory and semiconductor chips is set to benefit technology players in emerging markets. He highlighted that the Asia tech space is one of the best playbooks to invest in the AI theme mainly due to the cheaper and more attractive valuations of tech companies in emerging markets.
With that, let’s take a look at the 9 Most Undervalued Foreign Stocks to Buy Now.
Our Methodology
To curate the list of Most Undervalued Foreign Stocks to Buy Now, we used the Finviz stock screener, Seeking Alpha, and Insider Monkey’s hedge fund database. Using the screener, we aggregated a list of ex-US stocks that are trading below the forward price to earnings ratio of 15. Lastly, after cross-checking the valuations from Seeking Alpha we ranked the stocks in ascending order of the number of hedge fund holders.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
9 Most Undervalued Foreign Stocks to Buy Now
9. Toyota Motor Corporation (NYSE:TM)
Forward Price to Earnings Ratio: 10.1
Number of Hedge Fund Holders: 20
Toyota Motor Corporation (NYSE:TM) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 14, Freedom Broker upgraded Toyota Motor Corporation (NYSE:TM) from Hold to Buy and raised the price target from $221 to $230. The analyst noted that the company appears to be adopting the new operating environment and expects the company to show signs of recovery in its financial performance.
Recently, on May 8, the company posted its fiscal Q4 2026 earnings. During the quarter, the company reported roughly 50% decline in quarterly earnings and expects full-year profits to decline by about a fifth. The report highlighted that most of this damage is due to higher material costs, followed by delivery delays and weaker sales volumes. Moreover, the increase in prices is also impacting everything from fuel to transportation and paints used at the assembly plants.
Despite these pressures, Toyota sees a bright spot in hybrid vehicles, with sales expected to surpass 5 million units for the first time. On the same day, Reuters reported that Toyota has warned that the ongoing Iran war is expected to cost around $4.3 billion in the current financial year. According to Reuters this is one of the starkest warnings issued by any global company related to the US-Iran conflict.
Toyota Motor Corporation is a global leader in the automotive industry, designing, manufacturing, and selling a wide range of passenger cars, trucks, and commercial vehicles under the Toyota, Lexus, and Daihatsu brands.
8. HSBC Holdings plc (NYSE:HSBC)
Forward Price to Earnings Ratio: 10.39
Number of Hedge Fund Holders: 25
HSBC Holdings plc (NYSE:HSBC) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 14, Morgan Stanley raised its price target on HSBC Holdings plc (NYSE:HSBC) from 1,419 GBp to 1,463 GBp and maintained an Equal Weight rating on the stock.
The raised price target comes despite recent challenges for the bank. The company released its fiscal Q1 2026 earnings report on May 5. During the quarter, the bank posted pretax profit of $9.4 billion, below the estimates of $9.5 billion and the $9.59 billion average of broker estimates compiled by the bank. The bank also revised its 2026 credit loss forecast upward to 45 basis points of average gross loans from 40 basis points, citing an uncertain outlook.
According to a Reuters report published on the earnings day, HSBC’s results performed poorly against European rivals as Deutsche Bank posted record quarterly profits, and UBS beat forecasts on strong trading. Analysts at Citi noted that the bank’s wealth business growth of 18% during the quarter also lagged behind Standard Chartered’s 32% growth.
The same report also noted that HSBC reported an unexpected $400 million loss related to the collapse of British mortgage lender Market Financial Solutions (MFS). The loss stemmed from HSBC’s lending to Apollo-backed firm Atlas SP, which had significant exposure to MFS before it collapsed amid fraud allegations. Reuters highlighted that the incident has intensified regulatory scrutiny of banks’ involvement in the $3.5 trillion private credit industry. As a result, regulators in the US, UK, and Canada have all launched reviews, while the US Federal Reserve and Treasury Department have also flagged concerns.
7. TotalEnergies SE (NYSE:TTE)
Forward Price to Earnings Ratio: 8.06
Number of Hedge Fund Holders: 26
TotalEnergies SE (NYSE:TTE) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 12, Morgan Stanley raised the price target on TotalEnergies SE (NYSE:TTE) from EUR 88.3 to EUR 89.1, while maintaining an Overweight rating on the shares. More recently, on May 18, TD Cowen upgraded the stock from Hold to Buy and raised the price target from $66 to $97.
The ratings follow TotalEnergies fiscal Q1 2026 earnings reported on April 29. During the quarter, the company posted strong earnings. The adjusted net income reached $5.4 billion, reflecting a 29% year-on-year growth and ahead of analyst expectations of $5 billion. A report by Reuters noted that the results were driven largely by the ongoing Iran war, which has sent global energy prices soaring, with Brent crude reaching near $120 a barrel.
The report by Reuters highlighted that while the US-Iran conflict has disrupted the company’s operations by forcing it to shut down 15% upstream output, the higher prices across all business segments has more than offset this loss. The most notable segment for the company was its refining and chemicals, which surged five fold to $1.6 billion, driven by strong trading activity.
As a result, the company raised its dividend by 5.9% and doubled share buybacks to $1.5 billion for Q2. This reflects a reversal from its cautious stance in late 2025, when low oil prices had prompted cost-cutting.
TotalEnergies SE is a global multi-energy company that produces and markets oil, biofuels, natural gas, renewables, and electricity.
6. Rio Tinto Group (NYSE:RIO)
Forward Price to Earnings Ratio: 12.4
Number of Hedge Fund Holders: 38
Rio Tinto Group (NYSE:RIO) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 15, Liam Fitzpatrick from Deutsche Bank raised the firm’s price target on Rio Tinto Group (NYSE:RIO) from 6,200 GBp to 6,900 GBp, while maintaining a Hold rating on the shares.
The company had reported its first quarter 2026 production and operations review on April 21, and the stock has gained more than 3% since the release. During the quarter, the company’s flagship Pilbara iron ore operations posted second highest first quarter production since 2018. The production rose 13%, driven by improved productivity and fewer weather related disruptions. Moreover, the Iron ore sales also grew 2.4% year-over-year to 72.4 million metric tons. Despite the growth, sales fell short of Visible Alpha consensus estimates of 74.6 million metric tons. However, management maintained a full-year Pilbara sales forecast of 323–338 million tons.
The report by Reuters noted that on the cost side, higher diesel prices have added pressure, though management says its scale and global supply-chain leverage have kept its cost position resilient. The bigger concern lies in the second half of the year, where jet fuel and diesel shortages are seen as the key operational risk. These could affect equipment, logistics, and the movement of personnel to remote mining sites.
Rio Tinto Group is one of the most diversified mining groups globally, with operations spanning iron ore, copper, aluminum, lithium, and other critical minerals. Headquartered in London and operating as a dual-listed company with Rio Tinto plc in London and Rio Tinto Ltd in Melbourne, the company traces its origins to 1873. Its scale, geographic diversity, and low-cost asset base have made it one of the most durable names in the global resources sector.
5. UBS Group AG (NYSE:UBS)
Forward Price to Earnings Ratio: 13.98
Number of Hedge Fund Holders: 39
UBS Group AG (NYSE:UBS) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 15, the Federal Reserve Board announced that it has formally ended its enforcement actions against UBS and its acquired subsidiary Credit Suisse, marking the close of a regulatory saga that began in 2023.
According to a report by Bloomberg, the actions had been triggered by serious failures in counterparty credit-risk management at Credit Suisse, specifically in its dealings with collapsed hedge fund Archegos Capital Management. When Archegos imploded in March 2021, Credit Suisse was by far the hardest hit among affected banks, suffering losses of around CHF 5 billion. This became a central factor in Credit Suisse’s broader crisis, which eventually led to its emergency takeover by UBS in 2023.
The report noted that the Fed had imposed fines totaling roughly $387 million and mandated improvements in supervision, liquidity, and data management. The UK’s Prudential Regulation Authority fined the bank £87 million, while Switzerland’s FINMA required corrective measures.
UBS has met those obligations and the Fed’s termination of the orders indicates that regulators are satisfied with the remediation work carried out. Bloomberg noted that this allows UBS Group AG to move forward with fewer legacy regulatory burdens hanging over its integration.
UBS Group AG is a global financial institution that provides wealth management, personal and corporate banking, asset management, and investment banking services to private, institutional, and corporate clients worldwide.
4. British American Tobacco p.l.c. (NYSE:BTI)
Forward Price to Earnings Ratio: 13.28
Number of Hedge Fund Holders: 40
British American Tobacco p.l.c. (NYSE:BTI) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 19, the company announced opening a new Information, Digital and Technology hub in Bengaluru, India. Management noted that this step is part of the company’s strategy to become a more agile and data driven business.
Notably, the hub centers around the company’s Future Capabilities Centre, which is designed to consolidate key technology functions under one roof and accelerate innovation across the group. Moreover, the hub will bring together teams working across Cyber Security, Data & Analytics, Artificial Intelligence, and Digital Platforms. These teams will collaborate with strategic partners to drive continuous improvement.
British American Tobacco p.l.c. (NYSE:BTI) noted that the choice of Bengaluru is deliberate as it is widely regarded as India’s premier technology ecosystem. The announcement indicates that BAT is increasingly embedding technology at the core of its operations, rather than treating it as a peripheral function.
British American Tobacco (NYSE:BTI) provides tobacco and nicotine products to consumers in the US, Europe, Latin America, Canada, the Asia-Pacific, the Middle East, Central Asia, Caucasus, and Africa.
3. Shell plc (NYSE:SHEL)
Forward Price to Earnings Ratio: 7.98
Number of Hedge Fund Holders: 43
Shell plc (NYSE:SHEL) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 18, HSBC analyst Kim Fustier upgraded Shell plc (NYSE:SHEL) from Hold to Buy and raised the price target from 3,350 GBp to 3,700 GBp. The analyst noted that two key factors drove the upgrade, including the firm’s upwards revision of cash flow estimates for the company and the recently completed ARC Resources deal has meaningfully improved Shell’s medium-term upstream growth visibility. The analyst noted that this gives investors greater clarity on future production and earnings.
Shell plc (NYSE:SHEL) reported its fiscal Q1 2026 earnings on May 7. According to a Reuters report published on the earnings day, the company’s first quarter adjusted earnings grew to $6.92 billion, beating analyst expectations of $6.36 billion. This was recognized as the highest quarterly profit in two years and was driven largely by gains linked to the Middle East war, which has pushed global energy prices sharply higher. Trading in its chemicals and products division was a standout, delivering $1.93 billion against expectations of just $1.24 billion.
The company also raised its dividend by 5%. However, the quarterly buyback was trimmed from $3.5 billion to $3 billion. Looking ahead, the company expects second quarter integrated gas production to fall by 36% due to the conflict’s impact.
Shell plc (NYSE:SHEL) is an integrated energy company with operations spanning exploration, production, refining, marketing, and chemical manufacturing, alongside growing investments in biofuels and hydrogen.
2. Novo Nordisk A/S (NYSE:NVO)
Forward Price to Earnings Ratio: 12.78
Number of Hedge Fund Holders: 55
Novo Nordisk A/S (NYSE:NVO) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 6, Reuters reported that Novo Nordisk A/S (NYSE:NVO) topped first-quarter profit forecasts and also raised the full-year outlook slightly.
The results were driven by the company’s new Wegovy weight-loss pill, which was launched in the US in January. During the quarter the sales hit 2.26 billion Danish crowns, nearly double the analysts expectations. Moreover, the total prescriptions also topped the 2 million mark since its launch. The company calls this the strongest GLP-1 launch by volume in US history.
The adjusted operating profit for the quarter came in at 32.86 billion Danish crowns, and topped the expectation of 28.74 billion. Moreover, the group sales came in at 70.06 billion Danish, above the 69.07 billion expected by analysts. Looking ahead, Novo plans to expand the Wegovy pill beyond the US in the second half of 2026, with regulatory submissions already filed in Europe. The company forecasts full-year adjusted sales and operating profit to decline by 4% to 12%, better than the previously expected 5% to 13% decline.
Novo Nordisk is a drug manufacturer for global pharmaceutical products that operates through two segments: Obesity & Diabetes Care and Rare Disease. The company was founded in 1923 and is headquartered in Denmark.
1. PDD Holdings Inc. (NASDAQ:PDD)
Forward Price to Earnings Ratio: 7.93
Number of Hedge Fund Holders: 67
PDD Holdings Inc. (NASDAQ:PDD) is one of the Most Undervalued Foreign Stocks to Buy Now. On May 11, Reuters reported that Shein has accused PDD Holdings Inc. (NASDAQ:PDD)’s platform Temu of copyright infringement “on an industrial scale.” The company alleged that Temu used thousands of Shein’s product photos to advertise copycat clothing on its platform.
The report noted that Shein’s lawyer described it as an attempt to gain an unfair advantage by piggybacking on a more established competitor. On the other hand, Temu in the trial that opened in London’s High Court denied the allegations and framed the lawsuit as a competitive tactic rather than a genuine intellectual property dispute.
Shein’s lawyer Benet Brandreth noted that Temu has dropped its defense against the copyright claims covering nearly 2,300 photos taken by Shein employees. Brandreth compared this to pleading guilty at the last moment. On the other hand Temu has filed a counter-claim, seeking damages after an earlier injunction forced it to remove thousands of product listings.
Separately, Temu alleges that Shein broke competition law by locking fast-fashion suppliers into exclusive agreements. This claim is expected to be heard at a separate trial next year.
That said, PDD Holdings Inc. is expected to release its fiscal first quarter 2026 earnings on May 27. The Street expects the company to post revenue around $16.08 billion, along with a GAAP EPS of $2.15.
PDD Holdings Inc. operates e-commerce platforms including Temu, offering a wide range of consumer products globally.
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