Diversify Your Portfolio with These 5 Outperforming Foreign Stocks

NYSE: SHG | Shinhan Financial Group Co. Ltd. ADR News, Ratings, and Charts

SHG – The U.S. stock market rebounded yesterday after talks around a possible easing of import tariffs on Chinese . However, investors remain concerned about multi-decade high inflation and the possibility of economic contraction. This is expected to keep the markets volatile in the near term. So, we think that amid the current, uncertain, domestic economic conditions, one could consider diversifying one’s portfolio by adding fundamentally strong foreign stocks Shinhan Financial (SHG), Ritchie Bros. Auctioneers (RBA), Enel Américas (ENIA), Grupo Aeroportuario del Sureste (ASR), and PLDT (PHI). Read on.

After last week’s broad-based sell-off, the U.S. stock market rebounded yesterday. Talks of possible tariff cuts on Chinese goods evoked a positive market reaction.  The Dow Jones Industrial Average, which had witnessed its first eight-week losing streak since 1923, rebounded, gaining 618 points to close yesterday’s trading session at 31,880.24. The S&P 500 and Nasdaq Composite rose 1.8% and 1.6%, respectively, to close at 3,973.75 and 11,535.27.

Despite the bounce, investors need to be careful because it may be just a minor relief rally amid largely uncertain market conditions. The Fed’s aggressive interest rate hikes to tame multi-decade high inflation, supply disruptions arising from the Ukraine-Russia war, the decline in GDP in the first quarter, rising energy prices, and COVID-19 restrictions in China are expected to keep the market under pressure in the near term.

Given such uncertain market and domestic economic conditions, investors could consider betting on foreign stocks to diversify their portfolios’ risk. Investing in foreign stocks helps mitigate portfolio risks because their performance is not related to the domestic economic conditions. So, we think it could be wise to bet on the stocks of fundamentally strong foreign companies Shinhan Financial Group Co., Ltd. (SHG), Ritchie Bros. Auctioneers Incorporated (RBA), Enel Américas S.A. (ENIA), Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR), and PLDT Inc. (PHI) to the portfolios. These stocks have largely outperformed the market.

Shinhan Financial Group Co., Ltd. (SHG)

Headquartered in Seoul, South Korea, SHG provides financial products and services. The company operates through six segments–Banking; Credit Card; Securities; Life Insurance; Credit; and Others. It offers retail banking services that include demand, savings, fixed deposit taking, checking accounts, and corporate banking services, such as investment banking, real estate financing, infrastructure, structured financing, equity/venture investments, and mergers and acquisitions consulting.

SHG’s revenue for its fiscal first quarter ended March 31, 2022, increased 56.3% sequentially to KRW13.96 trillion ($11.03 billion). The company’s operating income increased 13.3% year-over-year to KRW1.90 trillion ($1.50 billion). Also, its net income increased 16.6% year-over-year to KRW1.42 trillion ($1.12 billion).

Analysts expect SHG’s EPS for its fiscal 2023 to increase 5% year-over-year to $11.28 billion. The stock has gained 7.3% in rice year-to-date to close the last trading session at $33.19.

SHG’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall B rating, which translates to a Buy. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

SHG has a B grade for Value, Momentum, and Stability. It is ranked #13 among the 95 stocks in the B-rated Foreign Banks industry. Click here to see the other ratings of SHG for Growth, Sentiment, and Quality.

Ritchie Bros. Auctioneers Incorporated (RBA)

Headquartered in Burnaby, Canada, RBA is a global asset management, disposition, and services company. The company services customers in the buying and selling of used heavy equipment, trucks, and other assets. It offers customers solutions for buying and selling used industrial equipment and other durable assets through unreserved live on-site auctions, online marketplaces, listing services, and private brokerage services.

This month, RBA conducted its largest-ever auctions in Ontario and Manitoba, selling more than C$71 million ($55.5 million) of equipment and trucks in Toronto and C$31 million ($24.23 million) of assets in Winnipeg. RBA’s Regional Sales Manager Ryan Pottruff said, “We bulldozed past our previous Toronto sales record, set last May, with gross transaction value up approximately 35% year-over-year.”

For the fiscal first quarter ended March 31, 2022, RBA’s total revenue increased 19% year-over-year to $393.92 million. The company’s adjusted EBITDA increased 44% year-over-year to $104.90 million. Also, its non-GAAP adjusted operating income increased 54% year-over-year to $88.86 million. In addition, its non-GAAP net income increased 42% year-over-year to $50.96 million.

For its fiscal 2022, RBA’s EPS and revenue are expected to increase 54.9% and 11.6%, respectively, year-over-year to $2.68 and $1.99 billion. Over the past three months, the stock has gained 17.7% in price to close the last trading session at $59.46.

RBA’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which translates to a Buy in our proprietary rating system.

It has a B grade for Momentum, Sentiment, and Quality. Within the B-rated Industrial Services industry, it is ranked #34 out of 89 stocks. To see the other ratings of RBA for Growth, Value, and Stability, click here.

Click here to check out our Industrial Sector Report for 2022

Enel Américas S.A. (ENIA)

Headquartered in Santiago, Chile, ENIA is engaged in the electricity generation, transmission, and distribution businesses in Chile, Brazil, Colombia, Peru, and Argentina. It operates through the Generation, Transmission, and Distribution segments.

On February 25, 2022, ENIA announced that its renewable energy subsidiary Enel Green Power Guatemala (EGPG) had signed a power purchase agreement with three product bottlers of the Coca-Cola brand in Guatemala for the annual supply of 28.60 GWh of renewable energy over the next two years. Enel Green Power Central America’s Head, Bruno Riga, said, “Working hand in hand with these three companies is an opportunity to ratify our commitment to the energy transition, deliver renewable energy, and add allies that share our vision of sustainability.”

ENIA’s adjusted EBITDA increased 41.2% year-over-year to $1.11 billion for the first quarter, ended March 31, 2022. The company’s total net income increased 63.9% year-over-year to $473 million. Also, its group net income increased 99.6% year-over-year to $366 million.

Analysts expect ENIA’s EPS for the quarter ending June 30, 2022, to increase 200% year-over-year to $0.15. Its revenue for its fiscal year 2022 is expected to increase 4% year-over-year to $16.84 billion. The stock has gained 6.2% in price year-to-date to close the last trading session at $5.78.

ENIA’s POWR Ratings reflect solid prospects. The stock has an overall B rating, translating to a Buy in our proprietary rating system.

It has a B grade for Value, Momentum, and Sentiment. It is ranked #10 out of 53 stocks in the B-rated Utilities – Foreign industry. Click here to see the other ratings of ENIA for Growth, Stability, and Quality.

Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)

Headquartered in Mexico City, ASR and its subsidiaries hold concessions to operate, maintain, and develop approximately nine airports in the Southeast region of Mexico and more than 10 airports in Colombia. The company operates through segments that include Cancun airport and subsidiaries, the Villahermosa airport, the Merida airport, and Services. The airports are in Cancun, Cozumel, Merida, Huatulco, Oaxaca, Veracruz, Villahermosa, Tapachula and Minatitlan, Mexico, and in Medellin, Colombia.

For its fiscal first quarter ended March 31, 2022, ASR’s total revenues increased 87.1% year-over-year to Mex$5.42 billion ($0.27 billion). The company’s EBITDA increased 130.8% year-over-year to Mex$3.67 billion ($0.18 billion). Also, its EPS came in at Mex$7.3124, representing an increase of 132.1% year-over-year.

For the quarter ending June 30, 2022, ASR’s EPS and revenue are expected to increase 84.4% and 31.3%, respectively, year-over-year to $3.78 and $277.64 million. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 25.2% in price to close the last trading session at $215.01.

ASR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

It has a B grade for Growth, Momentum, Sentiment, and Quality. Within the Air/Defense Services industry, it is ranked #16 out of 76 stocks. To see the other ratings of ASR for Value and Stability, click here.

PLDT Inc. (PHI)

Headquartered in Makati City, Philippines, PHI provides telecommunications and digital services. It operates through three segments: Wireless, Fixed Line, and Others. The company offers cellular mobile, Internet broadband distribution, operations support, software development, and satellite information and messaging services and sells Wi-Fi access equipment.

On April 20, 2022, PHI announced that its subsidiaries Smart Communications, Inc. and Digitel Mobile Philippines, Inc. had signed a sale and purchase agreement in connection with the sale of 5,907 telecom towers and related passion telecom infrastructure for PHP 77 billion. PHI’s Chairman Manuel V. Pangilinan said, “This partnership with experienced international tower companies represents another milestone in PLDT’s strategic transformation. We expect to reap benefits in terms of a valuation uplift and capital reallocation with PLDT applying the proceeds to deleverage, further invest in the network, and return cash to shareholders via a special dividend.”

PHI’s total revenues for its fiscal first quarter ended March 31, 2022, increased 4.6% year-over-year to ₱50.14 billion ($0.95 billion). The company’s EBITDA margin came in at 53%, compared to 51% in the year-ago period. Also, its net income attributable to equity shareholders increased 56.4% year-over-year to ₱9.07 billion ($0.17 billion). In addition, its total current assets increased 3.1% to ₱76.25 billion ($1.45 billion), compared to ₱73.93 billion ($1.41 billion) for the fiscal year ended Dec. 31, 2021.

For its fiscal 2023, PHI’s revenue is expected to increase 5.5% year-over-year to $4.10 billion. Over the past nine months, the stock has gained 54.8% in price to close the last trading session at $38.17.

PHI’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

It has an A grade for Stability and a B grade for Sentiment and Quality. Within the A-rated Telecom – Foreign industry, it is ranked #18 out of 46 stocks. To see the other ratings of PHI for Growth, Value, and Momentum, click here.


SHG shares were unchanged in premarket trading Tuesday. Year-to-date, SHG has gained 8.14%, versus a -16.98% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


More Resources for the Stocks in this Article

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PHIGet RatingGet RatingGet Rating

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