Generally at this point of time, the large cap universe is fairly to overly valued. Attractive ideas are hard to find for domestic large cap stocks. Going overseas gives us a few extra options. This screen includes domestic stocks as well as international stocks that trade in the US as ADRs. I have also expanded my filters to go up to 15 times earnings and 1.5 times book value. Dividends are welcome although not required and extra emphasis is on earnings growth in the recent past. Market capitalization is $13 Billion and above.
This list represents a variety of industries ranging from insurance, banking, oil & gas, and telecom. Other than US, countries represented include Japan, Korea, Canada, UK and Switzerland.
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This is a shortlist of stocks you should research further before making a determination to buy.
|Company Name||Symbol||Industry||Type||Market Capitalization||P/E (Price/TTM Earnings)||Price/Book||Dividend Yield|
|VODAFONE GROUP PLC||VOD||Telecommunications||ADR||$88.3B||4.8||0.75||7.60%|
|LINCOLN NATIONAL CORP||LNC||Life Insurance||Common Stock||$13.9B||10.7||0.96||1.20%|
|CAPITAL ONE FINANCIAL CORP.||COF||Credit Services||Common Stock||$46.2B||11.2||1.06||1.40%|
|ORIX CORP||IX||Credit Services||ADR||$21.1B||12||1.13||-|
|HONDA MOTOR CO LTD||HMC||Auto Manufacturers||ADR||$63.6B||11.3||1.11||1.10%|
|KB FINANCIAL GROUP||KB||Banking||ADR||$13.5B||11.5||0.56||-|
|ACE LTD||ACE||Property and Casualty Insurance||ADR||$35.1B||10||1.2||2.50%|
|PNC FINANCIAL SERVICES GROUP INC.||PNC||Banking||Common Stock||$44.6B||11.4||1.11||2.10%|
|MANULIFE FINANCIAL CORP||MFC||Life Insurance||ADR||$38.1B||11.6||1.4||2.40%|
|XEROX CORP||XRX||IT Services||Common Stock||$15.2B||13.9||1.24||2.00%|
|HSBC HOLDINGS PLC||HSBC||Banking||ADR||$195.2B||13.1||1.04||3.90%|
|HESS CORP||HES||Oil & Gas||Common Stock||$31.0B||11.1||1.28||1.00%|
|NIPPON TELEGRAPH & TELEPHONE CORP NTT||NTT||Telecommunications||ADR||$74.0B||13.4||0.9||2.50%|
|WELLPOINT INC||WLP||Health Care Plans||Common Stock||$32.1B||14||1.33||1.60%|
|SK TELECOM CO LTD||SKM||Wireless Communications||ADR||$16.7B||12.7||1.36||0.80%|
|SUNCOR ENERGY INC.||SU||Oil & Gas||ADR||$61.0B||14.4||1.47||2.00%|
If you recall, Suncor is one of the newer holdings of Berkshire Hathaway. While fundamentals do play a part, a good part of the investment thesis for SU and arguably, all the other stocks in this list is based on the trends one expects to unfold over the intermediate to long term. Generally for large cap stocks, future economic trends and industry fundamentals become more important as the greater liquidity in the stock itself tends to ensure a reasonably fair market valuation. For ADRs, country risk also comes into play, as well as consideration needs to be paid for foreign exchange fluctuations over time.
Analyzing companies like Orix and KB Financial may be difficult as these have greater ties to the politico-economic environment in the respective countries. The valuations though are attractive enough to justify due diligence time. As usual, these screens uncover new ideas but they do require further investigation before you can decide to purchase any of these stocks.