In this article, we discuss the 10 best international stocks in 2021. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best International Stocks in 2021.
Diversifying your stock portfolio by increasing exposure to international companies working in high-growth areas is perhaps one of the best ways to hedge against risks, according to analysts. According to a study by consulting firm McKinsey & Company published in March 2021, the Mega 25 companies generated a collective market-capitalization growth of over $5.8 trillion. The Mega 25 includes international stocks such as Alibaba Group Holding Limited (NYSE: BABA), Apple Inc. (NASDAQ: AAPL), Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), and Sea Limited (NYSE: SE).
Furthermore, during the fourth quarter of 2020, international stocks began to gain traction in the global stock market propelled by anticipation for COVID-19 vaccinations. The international vaccine-manufacturing stocks are likely to have benefited most from the fast-growing biotech sector. German biotech firm BioNTech SE (NASDAQ: BNTX) has gained 258%, year-to-date. On the other hand, shares of British vaccine maker AstraZeneca PLS (NASDAQ: AZN) increased 16% year-to-date.
Our Methodology
With this context in mind, here is our list of the 10 best international stocks in 2021. Most of these companies are headquartered outside of the United States and operate internationally. These stocks were selected based on their basic business fundamentals, hedge fund sentiment, and analyst ratings. The stocks were chosen and ranked based on the number of hedge fund holdings as of the end of the second quarter of 2021, based on our data of 873 hedge funds.
Why use hedge fund sentiment to choose stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best International Stocks in 2021
10. Toyota Motor Corporation (NYSE: TM)
Number of Hedge Fund Holders: 12
Toyota Motor Corporation (NYSE: TM) is a Japan-based multinational automotive manufacturer that produces vehicles under five brands, namely Lexus, Ranz, Hino, Daihatsu, and Toyota. Toyota ranks tenth on the list of the best international stocks in 2021.
Toyota Motor Corporation (NYSE: TM) markets vehicles in over 170 countries worldwide with manufacturing plants located in Europe, Africa, Asia & Middle East, Oceania, North America, and Japan. The company was founded in 1937 and started publicly trading in the NYSE in September 1999.
In April 2021, Toyota Motor Corporation (NYSE: TM) signed a definitive agreement to acquire the self-driving division of ride-hailing company Lyft for $550 million. The deal is expected to close in the third quarter of 2021.
On March 30th, Citi analyst Arifumi Yoshida resumed coverage on Toyota Motor Corporation (NYSE: TM) with a Buy rating. The analyst mentioned the company can deliver a 10% operating margin over fiscal 2022.
The company has a market cap of $278.79 billion and currently offers a dividend yield of 2.58%. In the fiscal fourth quarter of 2021, Toyota Motor Corporation (NYSE: TM) reported revenue of $69.44 billion.
Just like Alibaba Group Holding Limited (NYSE:BABA), Apple Inc. (NASDAQ:AAPL), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), BioNTech SE (NASDAQ:BNTX), AstraZeneca PLS (NASDAQ:AZN), and Sea Limited (NYSE:SE), Toyota Motor Corporation (NYSE: TM) is one of the best international stocks in 2021.
9. BioNTech SE (NASDAQ: BNTX)
Number of Hedge Fund Holders: 20
BioNTech SE (NASDAQ: BNTX) markets active immunotherapies for the treatment of diseases and it ranks ninth on the list of 10 best international stocks in 2021.
On August 31, the price target of BioNTech SE (NASDAQ: BNTX) was raised to $300 from $111 with a Neutral rating from UBS analyst Eliana Merle. The analyst believes BioNTech SE (NASDAQ: BNTX) plays a key role in the rollout of COVID vaccines.
The company has a market cap of $83.67 billion. In the second quarter of 2021, BioNTech SE (NASDAQ: BNTX) reported an adjusted EPS of $12.64, beating estimates by $3.68. The company’s revenue in the second quarter of 2021 came in at $6.23 billion, beating estimates by $2.35 billion.
Baron Funds mentioned BioNTech SE (NASDAQ: BNTX) in its Q2 2021 investor letter:
“BioNTech SE is a leader in the emerging field of mRNA drugs, with additional programs in engineered cell therapies, antibodies, and immunomodulators. Shares performed well for the quarter as the COVID-19 vaccine rollout progressed, and we believe the pandemic has been a strong proof point of the speed and efficacy of the mRNA platform. Beyond vaccines, we think BioNTech has potential to disrupt the biopharmaceutical space with a pipeline spanning oncology, infectious diseases, and rare diseases.”
8. Rio Tinto Plc (NYSE: RIO)
Number of Hedge Fund Holders: 21
Rio Tinto Plc (NYSE: RIO) is an Australian metals and mining corporation based in London that ranks eighth on the list of 10 best international stocks in 2021. The global mining giant operates in over 35 countries worldwide with most of its assets strategically located in Australia, North America, Europe, Asia, Africa, and Central and South America.
This August, Wells Fargo analyst Edward Kelly upgraded Rio Tinto Plc (NYSE: RIO) to a Buy rating from a Neutral rating with a $105.77 per share price target. Kelly believes that RIO has a compelling FCF outlook.
The company has a market cap of $122.21 billion and currently offers a dividend yield of 9.01%.
Just like Alibaba Group Holding Limited (NYSE:BABA), Apple Inc. (NASDAQ:AAPL), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), BioNTech SE (NASDAQ:BNTX), AstraZeneca PLS (NASDAQ:AZN), and Sea Limited (NYSE:SE), Rio Tinto Plc (NYSE: RIO) is one of the best international stocks in 2021.
7. Nokia Corporation (NYSE: NOK)
Number of Hedge Fund Holders: 26
Nokia Corporation (NYSE: NOK) is a multinational consumer electronics manufacturer based in Finland. The company specializes in telecommunications, information technology, and electronics. Nokia Corporation has operations in over 130 countries. Nokia Corporation (NYSE: NOK) ranks seventh on the list of 10 best international stocks in 2021.
Recently, Nokia Corporation (NYSE: NOK) released its Nokia 5.3, an Android phone made in India. The smartphone has a 64MP quad-camera and provides 2 days of battery life with one charge.
On August 3, Societe Generale analyst Aleksander Peterc raised the price target of Nokia Corporation (NYSE: NOK) to $7.81 from $6.27 per share and kept His Buy rating on the stock.
The company has a market cap of $29.33 billion. In the second quarter of 2021, Nokia Corporation (NYSE: NOK) reported an EPS of $0.11, beating estimated by $0.05. The company reported second-quarter revenue of $6.32 billion, beating estimates by $193.68 million.
6. Canadian Natural Resources Limited (NYSE: CNQ)
Number of Hedge Fund Holders: 27
Canadian Natural Resources Limited (NYSE: CNQ) is a hydrocarbon exploration company based in Canada and it ranks sixth on the list of 10 best international stocks in 2021. The company is the largest producer of oil and gas in Alberta with reserves in the Arctic and off the East Coast.
This August 6, TD Securities raised the price target of Canadian Natural Resources Limited (NYSE: CNQ) to $43.71 per share from $41.33 per share and kept its Buy rating on the stock.
The company has a market cap of $39.49 billion and currently offers a dividend yield of 4.51%. In the second quarter of 2021, Canadian Natural Resources Limited (NYSE: CNQ) reported an EPS of $0.99, beating estimates by $0.23. Following solid quarterly results, Canadian Natural Resources Limited (NYSE: CNQ) reported its expected FY2021 capital of $3.2 billion with a 1,225,000 BOD/d production.
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Disclosure. None. 10 Best International Stocks In 2021 is originally published on Insider Monkey.
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