U.S. stocks managed to fight their way back from a down January to finish the first quarter in positive territory. When final Q1 numbers were tallied, the S&P 500 Index put in a 1.7% total return. That’s not bad — and it’s great when you compare it to the total Q1 return for Chinese blue-chip stocks and other large-caps in emerging markets.
In fact, stocks in the blue-chip benchmark index ETF, the iShares China Large-Cap (FXI), sank in Q1, logging a total return of -6.8% through the first three months of the year. The decline in the wider emerging-market blue-chip stock index, the iShares MSCI Emerging Markets ETF (EEM), wasn’t as a bad as China, but the sector still declined 1.9% in Q1.
But those numbers don’t tell the whole story here.
Over the past several weeks, Chinese blue-chip stocks have soared, with FXI vaulting 8.4% since March 13. Blue-chip stocks also have spiked in emerging markets, with EEM also surging about 8.4% since March 13.
The rebound in many of the biggest Asian blue-chip stocks means investors have a chance to get in on the uptrend in some of the best companies based in the region. From China to South Korea to Taiwan, here are three Asian blue-chip stocks to buy now:
Asian Blue-Chip Stocks to Buy #1: China Mobile (CHL)
Click to Enlarge This behemoth is one of China’s best blue-chip stocks, but since the beginning of the year, China Mobile (CHL) has been hammered on fears of an economic slowdown, worries over the stability of the nation’s banking industry, and just a general distaste for all things China.
Yet the largest telecom company in the world also has come off the mat in remarkable fashion of late, vaulting some 11% since March 21. That big gain in CHL stock was in part due to notions of a stimulus coming from the Chinese government, and partly due to a long overdue oversold bounce.
Given that CHL stock still remains below its 50- and 200-day moving averages, I suspect there’s a lot more upside in this Chinese blue chip.
Asian Blue-Chip Stocks to Buy #2: Posco (PKX)
But like other Asian blue chips, PKX has come roaring back since talk of the latest China stimulus plans. That has propelled shares some 9% off their March low.
For Posco, the key to vibrant growth is China’s massive infrastructure build-out. Fear that this steel demand driver will falter typically causes traders to bailout of PKX. Conversely, talk of ramped-up building in the nation causes money to flow into PKX stock, and that’s what we’ve seen over the past several weeks.
And that’s also what I suspect we will continue to see in the months ahead.
Asian Blue-Chip Stocks to Buy #3: Taiwan Semiconductor (TSM)
Click to Enlarge When it comes to Asian emerging markets, there are few blue chips as well-known as Taiwan Semiconductor (TSM). The chipmaker has been battling the likes of rival Intel (INTC) for some time, and it has always managed to hold its own quite nicely.
Now, unlike China Mobile and Posco, TSM stock didn’t experience quite as significant a pullback in the beginning of 2014, although shares did sell off in January.
Since February, however, the bull has been stampeding in TSM stock, with shares up more than 21% since the Feb. 5 close. The recent run in TSM has allowed the shares to breach their 50- and 200-day moving averages. Shares also recently broke out to a new 52-week high before trimming a bit off of their total.
I suspect that if Asian blue-chip stocks continue to hold their current bid, TSM will continue to power higher.
As of this writing, Jim Woods did not hold a position in any of the aforementioned securities.