3 Overseas Stocks Traded On U.S. Exchanges That Remain In Buy Range
The HeadHunter Group (NASDAQ: HHR), ChipMOS Technologies (NASDAQ: IMOS) and Ternium (NYSE: TX) are top-performing American Depositary Receipts. These...
The HeadHunter Group (NASDAQ: HHR), ChipMOS Technologies (NASDAQ: IMOS) and Ternium (NYSE: TX) are top-performing American Depositary Receipts. These are companies domiciled outside the U.S., but U.S.-based banks issue certificates representing shares in the companies.
American Depository Receipts allow domestic investors to diversify internationally and gain exposure to companies they may not otherwise have access to.
About 75% of ADRs trade in the U.S. as a way to get exposure to U.S. markets and create liquidity for the equities and their investors. The ADRs and their dividend payments are priced in dollars.
The biggest ADRs available to U.S. investors include Roche Holding, Deutsche Telekom and BASF.
The HeadHunter Group operates an online recruitment platform in Russia and other Eastern European nations. The company has a market capitalization of $2.26 billion, placing it on the lower end of the mid-cap designation.
The stock, which went public in May 2019, rallied to an all-time high of $43.67 on July 2, but on Tuesday hit resistance between $43 and $44. That's at the upper end of a trading range that was established in late April. The stock is up 4.51% this week.
It cleared that resistance with Wednesday's price action, advancing 6.52%. It's currently buyable, but if the rally continues, the stock may become extended fairly quickly.
Earnings and revenue declined in 2020, but are on the rebound. Analysts see earnings of $1.04 per share this year, an increase of 51%. Next year, that's seen growing another 41% to $1.47.
The Cyprus-based company reports earnings in late August. It's topped estimates in the past three quarters.
Institutional ownership remains strong, with 29% of shares held by mutual funds. The number of fund owners grew from 128 to 130 in the most recent quarter. Several hedge funds added to their positions recently, as well.
In three of the past four weeks, upside trading volume was heavier than normal, a good indication of institutional buying.
Taiwan's ChipMOS Technologies provides testing and assembly services for equipment used in flat-panel displays.
The company's revenue has increased over the past three years.
One reason for its growth is that it provides a higher level of testing and assembly services than its competitors.
Its chip packaging and testing operations Taiwan-based, but the company serves a global clientele, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries.
Revenue grew at double-digit rates in the past eight quarters and rose from $18.48 billion in 2018 to $23.01 billion in 2020. Earnings declined in 2020, to $2.29 per share from $2.35 in 2019. However, analysts see a 75% increase this year, to $4 per share.
ChipMOS is a small-cap company, with a market capitalization just under $1.32 billion. As such, you wouldn't expect to see hundreds of mutual funds as owners. In fact, at the end of the previous quarter, that number stood at 15, down from 16 in the prior quarter.
The stock has been correcting below its April 9 high of $36.31, and is at its best levels since 2004. It cleared that point in Wednesday's session, rallying to $36.48 in double average trading volume.
With Wednesday's price action, the stock is currently in buy range. Investors should use caution with a thinly traded, relatively unknown stock like this one, and be aware that lack of liquidity could present challenges.
Luxembourg-based steel fabricator Ternium cleared a double-bottom base Wednesday, above a buy point of $39.60.
The company, which went public in 2006, has a market cap of $8.1 billion and 49 million shares in float. As such, it's a more attractive candidate than smaller companies for mutual fund owners. The number of fund owners was 170 in the most recent quarter.
Revenue was declining even before the pandemic, and that trend continued in 2020. However, revenue growth returned in the past two quarters, growing 15% and 43%, respectively.
Earnings have also been spotty, but that seems to be turning around, as well. Growth accelerated in the past two quarters, with the company reporting earnings of $3.07 per share in the quarter ended in March, up from a loss in the year-earlier quarter.
This stock is still in buy range. Investors should always be wary of chasing a stock once it becomes extended beyond a proper buy point, but Ternium closed Wednesday at $41.32, up 5.01%.
That puts the stock up 4.34% from its buy point. If you buy into a stock once it's about 5% above its buy point, you risk getting shaken out in a normal pullback, or getting impatient while your stock is trending along at a lower price than where you purchased.
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