Tired of U.S. Market Volatility? Here are Three Foreign Stock Alternatives

(By Andrew Dominguez)

Are roller coaster ups and downs in US markets giving you a little stock market motion sickness? Dee Gill of YCharts suggests looking overseas for companies whose businesses have little to do with “U.S. manufacturing output or our weekly jobless figures.”

“Companies that do most of their business in China, Brazil, Japan, Taiwan, India – places where the economies are growing and sovereign debt isn’t causing panic right now – are open to investors on the U.S. exchanges,” Gill adds.

In searching for possible investment opportunities, Gill screened for those with “reasonable” share prices, solid revenue growth, and strong fundamentals.

Gill lists three companies, Brazilian beverage company Companhia De Bebidas Das Americas Ambev (ABV), Banco Santander (SAN), and Guangshen Railway (GSH) of China. 

Ambev should continue to benefit from the surging Brazilian economy (and 13 other countries across the Americas) and its role as a bottler for PepsiCo outside the US. It also sells popular Anheuser-Bush InBev beer brands in Canada, including Budweiser and Bud Light. Sales have grown rapidly and the stock posts an attractive 4.8% dividend yield.

Banco Santander – Chile is a subsidiary of one of the largest banks in the world, Banco Santander. The strong brand name and the international backing have contributed to its prestige: the company “likes to brag that it has the best credit rating of all Latin American companies.” And its revenues have soared while those of big American and Euro banks have soured.

As for Guangshen, well, the Chinese Communist Party loves its trains. In a Time Magazine article last year, Austin Ramzy reports that Chinese officials are planning on spending over $700bn on railroad construction this decade. Rapid economic growth is also a boon. (Gill’s caveat: “The, um, accounting scandals that have plagued some Chinese stocks are a legitimate concern. One just hopes such foolishness woundn’t be permitted at a company so essential to China’s growth.”)

Intrigued? analyse these companies with Kapitall’s tools.

Here is the performance of ABV relative to the S&P 500 over the last year. As the chart shows, ABV has performed very well relative to the rest of the market:

 

 

SAN, on the other hand, has seen steep losses relative to the S&P 500 index over the last year. In other words, you would have been better off buying an index fund instead of the company.

 

 

GSH has also lagged the S&P 500 for most of 2011:

 

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