The Motley Fool

Bullish on International Trade? Try These 3 Smart Investments

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.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Magna International is a recommendation of Stock Advisor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.