12 Best Emerging Markets Stocks to Buy According to Analysts

Muhammad Jamal Akbar
9 min read

In This Article:

In this article, we will take a look at the 12 best emerging markets stocks to buy according to analysts. To skip our analysis of the recent trends and market activity, you can go directly to see the 5 Best Emerging Markets Stocks to Buy According to Analysts.

For the purpose of this article, we delved into the realm of emerging market stocks and identified emerging market companies whose shares are trading on the major stock exchanges in the United States. The MSCI Emerging Markets Index, maintained by MSCI was launched in 1988 and is the leading Index for emerging markets. The Index has changed significantly over the course of its history and countries have been added or removed based on the Index’s classification methodology over the years. It currently includes companies from 24 markets and has nearly $1.3 trillion  in assets under management benchmarked to the emerging market indexes.

The MSCI Emerging Markets index is heavily weighted by stocks belonging to the countries in the Asia Pacific region, with China leading the way with nearly 31.4% weightage in the Index which comprises of more than 1400 stocks. Taiwan, with 14.8% weightage, and India, with 13.7% weightage, hold the second and third highest weightage in the Index. As of February 29, the Index generated gross returns of -0.08% year-to-date and 9.18% over the last 12 months. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) held the highest weightage in the index with 7.63% weightage.

Emerging markets have been resilient in the face of global challenges such as inflation, interest rate hikes and other macroeconomic issues. Despite that, stocks belonging to the emerging markets account for a very small percentage of the global equity market capitalization with significant room for improvement. In addition, given the recent developments and macroeconomic conditions, stocks in the emerging markets are trading at attractive valuations. This has raised the prospect of investing in quality assets at attractive valuations and low entry points, which posits the possibility of a decent return in the future. You can read more about this in our recently published article: ETFs in an Emerging Market: 10 Best ETFs To Buy

In a recent report, Lazard Asset Management made the following comments about the emerging markets:

“We believe emerging markets remain one of the most mispriced asset classes globally. While absolute valuation levels have moved higher since they bottomed in the fourth quarter of 2022, relative to DM equities, valuations remain generally inexpensive. Valuation discounts relative to developed markets and US equities are hovering near 30% and 40%, respectively, both wider than their long-term averages. The sharp rise in the EM discount relative to DM is driven to a significant extent by China’s low valuations. Ex-China, however, EM discounts are inline with the 10-year average. Currently, the price-to-earnings (P/E) ratio for the MSCI EM Index is trading at approximately 12x over the next twelve months, or slightly above its long-term average of 11.3x”

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