North America’s economy isn’t in a robust position. Higher interest rates have already triggered bank defaults and volatility in America, while Canadian consumers and homeowners are struggling with the rising cost of living.
In such an environment, investors may want to cast a wide net and look for opportunities in other countries. Here are the top three TSX stocks that experience the benefits of global growth.
Prem Watsa’s investment vehicle in India is probably one of the best ways to bet on emerging markets. The billionaire investor has deployed over $5 billion in assets across India via Fairfax India Holdings (TSX:FIH.U). The company owns a stake in India’s largest stock exchange, a mid-sized bank, an airport in a tier-1 city, and a wealth management firm.
This portfolio is already well-positioned to benefit from India’s growth. Meanwhile, Watsa has promised to deploy even more capital in India in the next five years.
The stock is trading at U.S.12.50 per share, which is significantly below the book value of $18. For investors looking for a bargain deal on a rapidly growing emerging market, FIH is a great pick!
Constellation Software is one of the most successful tech companies in Canada. Now, a spin-off of the conglomerate is trying to replicate its success in Europe. Topicus (TSXV:TOI) targets niche vertical enterprise software across the continent. Its portfolio already includes inventory management, accounting, and government software services.
Over the past year, the company has deployed more capital for acquisitions than ever before. The valuation of software companies in Europe was already lower than their U.S. counterparts. Now, the tech correction has created a better opportunity.
I expect Topicus to deliver robust earnings growth in the near term as these recent acquisitions are fully integrated. Keep an eye on this underrated opportunity.
Alimentation Couche Tard
With 14,302 convenience stores across Canada, the United States, Mexico, Ireland, Norway, Sweden, Denmark, Estonia, Latvia, Lithuania, Poland, Japan, China, and Indonesia, Alimentation Couche-Tard (TSX:ATD) is one of the most international stocks on the market.
Couche Tard generates only 12% of its revenue in Canada. The majority, 69%, is based in the United States. Recently, Couche Tard acquired 2200 retail sites from oil company TotalEnergies in France. This further entrenches Couche Tard in Europe.
The company is arguably undervalued. The stock is trading at a price-to-earnings ratio of just 17.4. The dividend payout ratio is just over 10%, which means investors could expect further cash reward growth in the future. Meanwhile, sales are growing rapidly and the company is even buying back its own shares.
Keep an eye on this undervalued growth story.