While the U.S. is the best block in the neighborhood, sometimes, the area could get a little crowded, which then may offer an opportunity for global growth stocks. No one’s saying to avoid American securities – far from it. Instead, a little diversification might not be a bad idea.
Fundamentally, global growth stocks facilitate broader access to upside prospects. For example, everybody’s loving the U.S. tech space. However, the intense spotlight leaves plenty of compelling deals to be had in the international arena. Plus, with the same horses receiving most of the wagers, future returns could be limited.
In addition, going abroad may allow investors to cushion their portfolio against regional volatility. Admittedly, that’s a bit difficult these days because of the broader interconnectedness. Still, you don’t see legendary investors like Warren Buffett focus on just one country. He mixes it up, which can be an advantage during ambiguous circumstances.
Finally, it’s kinda nice betting on ideas that relatively few are thinking about. If you’re the adventurous type, here are intriguing global growth stocks to consider.
Toyota (TM)
For those with a long-term perspective, Toyota (NYSE:TM) seems an awfully intriguing idea. Sure, very few analysts cover TM stock. For those that do, there’s only one price target that’s publicly available: $228.96. Well, based on the most recent price action, that level has come and gone. So, it seems the Japanese automaker is a negative growth idea.
Admittedly, Toyota seems an oddball. Back in December 2022, then-company CEO Akio Toyoda remarked that the auto industry’s “silent majority” had questions about whether electric vehicles should be pursued exclusively. At the time, automakers were betting big that EVs would become the future of mobility and transportation.
Well, some harsh winter weather in certain locations put a dent in that narrative. With stories of EV drivers being stranded making multiple headlines, Toyota seems rather wise in not going full-bore electrification. Instead, it’s taking a multi-tier approach.
Since the start of the year, TM is up over 31%. EV king Tesla (NASDAQ:TSLA) is down almost 29%. The legacy automaker could very well be one of the surprise global growth stocks.
Dollarama (DLMAF)
In the U.S., we have Dollar Tree (NASDAQ:DLTR). In the Great White North, they have Dollarama (OTCMKTS:DLMAF). Obviously, we’re talking about two different business entities but the directive is quite similar: provide customers with compelling value across a broad assortment of general merchandise. Canada also has a lot of liberal politicians, I’ve been told, so discount retailers are a must.
Joking aside, if circumstances are rough here in the U.S. for average households, they’re likely to be challenging in Canada as well. With close proximity and shared history, Canada unsurprisingly represents the U.S.’s top trading partner. In many ways, whatever happens here doesn’t stay here.
Notably, the Canadian retail market reached a valuation of $473 billion in 2022. Further, experts project that the segment should expand at a compound annual growth rate (CAGR) of 4% from 2022 through 2027. This bodes well for Dollarama, which features a three-year revenue growth rate of 13.3%, putting it well above the defensive retail sector’s median growth rate of 5.5%.
Analysts peg shares a moderate buy, with the highest price target landing at $84.27.
Shell (SHEL)
A British multinational oil and gas company, Shell (NYSE:SHEL) is one of the biggest hydrocarbon specialists in the world. At first glance, that doesn’t seem to resonate with contemporary political and ideological winds. However, the science of fossil fuels cannot be denied: they command high energy density. Plus, with hydrocarbons enjoying established infrastructure, they’re difficult to replace.
To be fair, analysts have mixed views about Shell. On average, they anticipate sales by the end of the current fiscal year to land at $303.2 billion. If so, that would be 4.2% below last year’s print of $316.62 billion. And in 2025, they see sales at $299 billion – even worse.
However, the high-side target for 2024 clocks in at $329.29 billion. In my gut, I believe that’s more of a realistic estimate. Yes, EVs are the future and all that sweet jazz. I think the process of shifting over to renewables is more difficult than many realize.
Analysts rate SHEL as a consensus moderate buy with a $71.80 average price target. The high-side target comes in at $75, making it one of the global growth stocks to consider.
Himax Technologies (HIMX)
These days, seemingly everyone loves whispering sweet nothings about semiconductors. Well, that love hasn’t yet reached Himax Technologies (NASDAQ:HIMX). A fabless semiconductor manufacturer, Himax focuses on providing display imaging processing technologies. Its solutions are found in multiple applications, including consumer electronics and automotive uses. As well, it relates to digital intelligence via its smart sensor systems.
Still, HIMX is down more than 6% since the beginning of this year. Over the past 52 weeks, shares have slipped over 21%. Here, I must say that analysts on average aren’t exactly thrilled with Himax for this current year. They anticipate revenue of only $901.25 million, which would be down almost 5% from last year’s print.
However, in 2025, sales will land at $982 million, which is 9% above 2024’s projected top line. Also in 2025, earnings per share may reach 48 cents. That would be above 2023’s EPS of 29 cents and 2024’s projected per-share profitability print of 35 cents.
Robert W. Baird’s Tristan Gerra sees HIMX reaching $7 per share or 18% up. It’s an underappreciated idea among global growth stocks.
MercadoLibre (MELI)
An Argentine company headquartered in Montevideo, Uruguay, MercadoLibre (NASDAQ:MELI) operates online marketplaces dedicated to e-commerce and online auctions. The company enjoys a massive footprint throughout Latin America, which makes MELI one of the most intriguing global growth stocks. By one estimate, the region’s e-commerce space could expand 25% by 2027.
To be fair, MELI has been choppy this year, leading to a return of only 1% so far. However, in the past 52 weeks, shares have gained 33% of equity value. Just as well, analysts believe that MercadoLibre can deliver the goods on the financial front. By the end of 2024, revenue may reach $17.64 billion, up nearly 22% from last year’s tally of $14.47 billion.
Looking out to 2025, sales may reach $21.65 billion. Further, the most optimistic target calls for sales of $23.56 billion. Also, by the end of the current fiscal year, EPS may reach $33.99, well above 2023’s print of $19.46.
Lastly, analysts rate MELI a consensus strong buy with a $1,950 price target, implying 26% upside potential. Therefore, it’s one of the global growth stocks to keep on your watch list.
Sanofi (SNY)
A multinational pharmaceutical and healthcare company, Sanofi (NASDAQ:SNY) is headquartered in Paris, France. Per its public profile, the company engages in research and development of pharmacological products, primarily in the prescription market. However, the firm also develops over-the-counter medications. It covers seven major therapeutic areas: cardiovascular, central nervous system, diabetes, internal medicine, oncology, thrombosis, and vaccines.
Since the beginning of the year, SNY stock lost about 3%. Over the trailing year, it’s up only 3%. Granted, these aren’t exactly thrilling numbers. However, analysts anticipate a solid performance for fiscal 2024, with the company’s sales projected to hit $50.92 billion. If so, that would be 9.4% up from last year’s top line of $46.57 billion.
What’s more, the most optimistic target calls for 2024 sales of $54.43 billion. In terms of EPS, this metric should land at $4.33, a little bit off from the EPS of $4.38 in 2023.
However, analysts peg shares as a moderate buy with a $63 average price target. That implies an upside of 30%, making SNY one of the global growth stocks to consider.
Baidu (BIDU)
I’ve been talking about Chinese tech firm Baidu (NASDAQ:BIDU) for a while now and why not? With everyone talking about artificial intelligence, it’s only right to mention BIDU as an intriguing idea for global growth stocks. According to a Reuters report, in the company’s Q4 release, management stated that its generative AI applications have helped ramp up efforts to make money from its investments in the innovation.
One of my favorite stupid activities to do with generative AI is to attempt to trip it up. Recently, I asked what kind of medicine Dr. Dre practices. Sadly, AI is too smart for my silly tricks. But that’s the beauty of Baidu. It presented evidence that its digital intelligence is leading to meaningful results. That could be huge in a potential comeback for BIDU stock.
Analysts see substance in the company, projecting 2024 and 2025 sales to land at $20.42 billion and $21.92 billion. In 2023, sales reached $18.94 billion. Even more enticing, BIDU is super cheap, currently trading at a forward earnings multiple of 10X.
Finally, analysts rate Baidu a unanimous strong buy with a $164.52 average price target. That implies over 56% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
