Amid the novel coronavirus pandemic, I realized something. For the first time in a very long time, the world is united (generally speaking) toward a common goal: getting back to normal. But though we share the same fears and uncertainties, how we approach the return to normalcy will be different. This is one of the key reasons why I’m interested in Asian stocks to buy.
At the highest level, the eastern part of the world have different attitudes regarding economic policies. While the U.S. is the biggest net debtor nation – and something that we’ve done next to nothing about – Asian countries are on the opposite end of the spectrum. For instance, Japan is currently the top creditor nation, a status it has kept for 28 years straight.
At some point, you got to figure that this dynamic will have a substantial impact in the years ahead. Therefore, this is one reason to consider Asian stocks to buy.
Another is that this philosophy of monetary discipline goes down to the individual level. Early this year, CNBC featured kakeibo – the Japanese art of saving money. And as the Wall Street Journal points out, the Chinese worker has long been a prodigious saver. True, this has become less so in recent years. Even factoring in a spending hike among Chinese consumers, they’re still saving far more than their American counterparts.
With a global downturn seemingly on the horizon, most companies will suffer setbacks. Still, Asian corporations theoretically have a better chance of riding out the storm. Here, I’ll discuss these nine stocks to buy:
- Toyota (NYSE:TM)
- Sony (NYSE:SNE)
- Fast Retailing (OTCMKTS:FRCOY)
- Com (NASDAQ:JD)
- Baidu (NASDAQ:BIDU)
- iQiyi (NASDAQ:IQ)
- SK Telecom (NYSE:SKM)
- Korea Electric Power (NYSE:KEP)
- Gravity (NASDAQ:GRVY)
As with any other investment, bear in mind that we’re in unprecedented territory. Therefore, even with these stocks to buy, please engage cautiously.
When Covid-19 started disrupting daily life in China, among the first industries that felt the pain was the automotive sector. With the Asian juggernaut controlling global supply chains, companies like Toyota suddenly got hot under the collar. Naturally, TM stock slipped badly in February and March, as did many of its rivals.
Nevertheless, I’m willing to put Toyota in my list of stocks to buy. For full transparency, I’m biased: I almost always buy Japanese cars for their reliability. In a time of crisis, reliability is exactly what every consumer needs.
Now, take a look at a company like General Motors (NYSE:GM). Apparently, GM’s much-anticipated eighth-generation Chevrolet Corvette has embarrassing quality control issues. Honestly, what were you expecting from an American car? It’s news items like this that should inspire you to buy the dip on TM stock.
After all, we got to get to work somehow once this quarantine is over. And I’m sure most of us would prefer to do so without having to call a tow truck.
Among the Asian stocks to buy on this list, I’m the most biased toward Sony. It’s not just that I own shares of SNE stock. Rather, I spent nearly a decade working at Sony Electronics. In fact, most of my analytical skillsets have come through on-the-job training.
However, I’m also realistic. While Sony has experienced a resurgence over the years, making some of the best digital optics in the world for instance, their products are largely non-essential. Thus, I wasn’t surprised in the least when SNE stock tumbled starting in early February of this year.
Nevertheless, I’m confident that this will be one of the better non-essential Asian stocks to buy. Because of its aforementioned expertise in optics, Sony can drive under Apple’s (NASDAQ:AAPL) slipstream. And let’s not forget the big one – the upcoming PlayStation 5.
This is really where the savings power of the broader Asian community should see SNE stock at least keep pace with its rivals.
Fast Retailing (FRCOF)
Out of the popular apparel brands with which Americans are most familiar, Fast Retailing may not make it on the list. However, that might change because of Fast’s uber-popular brand Uniqlo. Using The Atlantic’s Gillian B. White’s words, Uniqlo is the Gap (NYSE:GPS) for millennials, at least when Gap was relevant. So, if you’re into investing in lesser-known names, you should give FRCOF stock a look.
Don’t get me wrong – investing in FRCOF stock is more than just about bragging rights. Instead, Uniqlo genuinely has the opportunity to take over America. Principally, I’m bullish because of the retailer’s cheap but chic apparel. You can look smart on a budget without having to shop at Nordstrom (NYSE:JWN) Rack like all the “normals” do.
But even if Uniqlo doesn’t take off in the U.S., it’s a monster retailer in Japan. With consumer spending pressured as it is, I expect further demand for low-cost-specialist Uniqlo. Therefore, FRCOF is one of the viable Asian stocks to buy.
Before I get into my discussion about JD.com and other Chinese companies, I must admit something: I have a love-hate affair with the stocks to buy of this nation. On one hand, you cannot ignore the explosive growth of the Chinese juggernaut. But on the other hand, experts like lawyer and author Gordon G. Chang have consistently warned about China’s duplicitous ways.
For me, this really came to a head when an audit uncovered fraud at Luckin Coffee (NASDAQ:LK). Turns out, the supposed Starbucks (NASDAQ:SBUX) killer was faking its revenues. That’s a big no no. But as Mr. Chang might say, it’s business as usual in China. Hence, I’m not so hot on JD stock as a matter of national and cultural association.
However, I want to be fair. If we enter a global recession (or depression), I’d feel much more confident with your average Chinese consumer. Decades of disciplined savings won’t disappear because of a few years’ worth of accelerated spending.
Therefore, I recognize the bullish case for JD stock. But especially now, be careful with stocks to buy in the world’s second-biggest economy.
If you’re seeking stocks to buy that can survive this pandemic, your best bet is to stick with super-relevant names. In this case, I really like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). During our forced quarantining, few services have been as vital as the company’s Google search engine. When we get the okay to leave our homes, Alphabet’s many other business units will start kicking in.
It’s the same concept with Baidu and more specifically, BIDU stock.
Often called the “Google of China,” Baidu owns the country’s largest search engine. With a population of around 1.4 billion people, cornering this market means that you’re cornering approximately 18% of earth’s population. Further, with millions in lockdown during China’s coronavirus battle, the tech giant undoubtedly received a nice demand lift.
Moving beyond Covid-19, Baidu can advantage its many investments in artificial intelligence. Logically, BIDU stock should be relevant over the next several years.
Over the years, I concede that I haven’t been the most optimistic about iQiyi. But with IQ stock falling sharply around mid-February, I’m willing to consider the bullish angle. Obviously, with the lockdowns that the Chinese government imposed, many consumers turned into hostage audience members. With nothing to do, streaming content helped whittle away the long, monotonous hours.
But will this translate to longer-term returns for IQ stock. Frankly, the equity’s recent performance has not provided any confidence. Therefore, this is probably one of the riskier Chinese stocks to buy. Nevertheless, as Matt McCall points out, iQiyi has demographics working in its favor. According to McCall:
…As with the U.S., streaming in China skews young. Most streaming users, or 38.4%, are between the ages of 25 to 34 years. Those include prime earning years, which implies further conversion opportunities for iQiyi as the populace ages.
But an interesting trend is that a sizable number of older people (ages 45 to 54 years) have also cut the cord. Therefore, the addressable market – coronavirus or not – is far more expansive and diverse in China than other regions.
It just might pan out. And with shares on a discount, you may want to give it a second look.
SK Telecom (SKM)
It’s not just the Chinese and Japanese consumer that saves money relative to their American and western counterparts. Rather, the South Koreans have also demonstrated fiscal discipline. In a survey among South Korean residents, every segment of the population except for those who only had a primary education or less reported saving their money.
As a result, investors have greater confidence that stocks to buy in the region will pan out longer term. Further, companies like SK Telecom are incredibly relevant due to their underlying business. As South Korea’s largest wireless carrier, SK Telecom represents the last thing consumers are willing to give up. Thus, SKM stock should have significant upside potential from its recent lows.
Additionally, once we get out of this coronavirus mess, the wireless carrier can get back to what made SKM stock special. Specifically, management has aggressively invested in augmented reality and virtual reality platforms. Last year, SK Telecom launched three 5G-capable AR and VR services, providing an immersive experience when watching eSports games.
You can expect more pertinent innovations as the world steadily recovers from Covid-19.
Korea Electric Power (KEP)
No matter how advanced a society becomes, it’s all for naught if you flip on the switch and nothing happens. In a bear market for any region, you should consider utility firms. When the markets are breaking out into new heights, companies like Korea Electric Power are boring. But in unparalleled times like this, KEP stock is very attractive.
Moreover, I believe the markets are not acting rationally regarding Korea Electric Power. This is an organization that is responsible for 93% of Korea’s electricity generation. Without KEP, this country would look more like its belligerent northern neighbor. That alone is enough to consider adding this equity into your list of Asian stocks to buy.
Overwhelmingly, though, stability is a universal word. No matter what happens with global coronavirus cases or with the broader economy, KEP stock will always be relevant.
With Gravity, I’ve saved the most speculative investment for last. However, if I had to pick one among this list of stocks to buy that interested me the most, I’d have to go with GRVY stock. First, the company specializes in online multiplayer role-playing games. As you know, the shift to online play is one of the biggest paradigm shifts in the gaming industry.
Second, GRVY stock has crumbled after closing at record levels last year. Of course, you can take the glass-half-empty approach here. Typically, great companies don’t hemorrhage market value. At the same time, Gravity has an opportunity to make an asymmetric impact.
As the wild popularity of Fortnite proved, you don’t have to be a giant company like Activision Blizzard (NASDAQ:ATVI) or Electronic Arts (NASDAQ:EA) to make an outsized impact in the gaming arena. While that’s no guarantee that Gravity will deliver a knock-out hit, it nevertheless has that chance.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he is long SNE stock.