From emerging markets to Turkish gold and Chinese electric cars, there are some smart ways to invest in foreign trade on the TSX index at the moment. The following three stocks represent just a few of the ways in which domestic investors who remain bullish on the global economy can gain exposure to markets beyond North America while still buying Canadian.
The mixed-industry, high-quality asset choice
Up 2.25% in the last five days, Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) remains one of the top choices for traders on the TSX index to gain exposure to top quality foreign assets spread across a range of countries and industries. With 27% one-year returns, this is a highly desirable stock with a solid track record (see a 152.7% past-year earnings growth to five-year returns of 109.6%).
While Brookfield Asset Management’s level of debt compared to net worth has gone up over the last five years from an already high 100.3% to today’s 123.9%, it’s an attractively valued stock, with a P/E of 13.6 times earnings and P/B of 1.8 times book; additionally, it pays a dividend yield of 1.36%.
The Asian electric vehicle pick
For exposure to the Chinese electric vehicle (EV) market, Magna International (TSX:MG)(NYSE:MGA) is the best choice on the TSX index. With five-year returns of 27.6% outperforming the TSX index and the North American auto industry, Magna International has to be one of the top stocks in its sector. Indeed, up 6.42% in the last five days at the time of writing, it’s still proving to be popular.
Its one- and five-year past earnings growth rates of 4.6% and 6.8%, respectively may be on the low end of the scale, though a past-year ROE of 21% is significantly high for the market. Meanwhile, though its debt is well-covered by operations, its comparative level of debt has climbed from 3.9% to 39.3% over the last five years, making for a so-so balance sheet.
The pure-play gold stock
For a Canadian-Turkish precious metal stock, your go-to has to be Alacer Gold (TSX:ASR). Down 14.18% in the last five days, this pure-play favourite is suffering along with a lot of other fellow metals and mining stocks, many of which are hitting their 52-week lows. Its one-year returns were 71.5%, however, indicating a desirable stock. Trading at book price, it’s looking like a bargain right now.
While Alacer Gold’s debt level is adequate, negative one- and five-year past earnings rates are something of a concern. This stock is one for gold bulls only at the moment, and even they should wait for the stock to stop falling if hunting for the best value. Upside-seekers are sure to see the stock rise should higher gold prices materialize later in the year, while a 19.4% annual growth in earnings is expected by analysts.
The bottom line
Magna International is an attractively valued stock at present, with a P/E of 7.6 times earnings and P/B of 1.6 times book, and pays a modest dividend yield of 2.87%. International gold remains a solid way to gain exposure to foreign markets, as would be something like South American oil; meanwhile, Brookfield Asset Management is a stylish and simple option for a long-term, low-risk investor.
