- Nestle (NSRGY): If economic conditions worsen, Nestle’s consumer goods brands could make for upside.
- Toyota (TM): While EV mania has gone wild, Toyota is built for the long haul of the transition.
- ASML (ASML): A leader in lithography technology, ASML is basically permanently relevant.
- Petrobras (PBR): Due to geopolitical rumblings, PBR could be one of the most important global stocks to buy.
- British American Tobacco (BTI): BTI’s transition to sleek e-cigarettes bodes well as a vice play.
- Toronto-Dominion Bank (TD): Financial firms can be winners among global stocks to buy due to rising rates.
- Airbus (EADSY): Terribly risky and contrarian, Airbus could fly higher from longer-term revenge travel.
Generally speaking, most financial advisors recommend their clients to gear a majority of their portfolios’ allocation toward U.S.-based equities. Even in the worst of circumstances, the American economy tends to be the best bang for your buck. Nevertheless, for diversification purposes, it helps to broaden your horizon with global stocks to buy.
For one thing, the U.S. equities sector is mature and arguably saturated. While it represents the global performance benchmark, because so many people are banking on its fortunes, the return potential for American blue chips could be limited. It’s no guarantee, of course, but shifting your attention to less-participated global stocks to buy could enhance your return potential.
Another factor to consider is that international equities may move on other variables independent of those that affect the American market. By having exposure to global stocks to buy, you may be able to lessen the volatility in your portfolio. Seeing as how we’re entering into uncharted territory, this diversification could be worth its weight in gold.
Finally, going abroad presents to you compelling opportunities outside the domestic arena. With out-of-the-box thinking becoming a crucial attribute during these strange times, these global stocks to buy deserve your attention.
|TM||Toyota Motor Corporation||$171.83|
|PBR||Petróleo Brasileiro S.A. – Petrobras||$14.48|
|BTI||British American Tobacco p.l.c.||$43.17|
|TD||The Toronto-Dominion Bank||$74.08|
Global Stocks to Buy: Nestle (NSRGY)
Some of our favorite brands have international roots, which is the case for consumer goods giant Nestle (OTCMKTS:NSRGY). From confectionary to coffee products to even pet food, Nestle commands significant market share in the products that folks everywhere buy on a daily basis. Because of this stone-cold reality, NSRGY makes for a relatively safe option among global stocks to buy.
As the pandemic demonstrated, people will shift their spending habits to the necessities, allowing companies that sell critical goods to survive and sometimes thrive. In Nestle’s case, the company expanded revenue in 2020 despite the coronavirus impact. And in 2021, the firm’s net income of nearly $18.5 billion was the biggest haul since 2010.
In a way, Nestle is a proven entity among global stocks to buy when trouble strikes. With recession fears continuing to take a bite out of investor sentiment, those still wishing to speculate in the equities sector should give NSRGY a long look.
Under current circumstances, eyeballing the automotive segment of global stocks to buy seems suspect. No matter where you look, supply chains have been disrupted. Worse yet for companies like Toyota (NYSE:TM), Russia’s dangerous decision to attack Ukraine presents unique challenges for the automotive industry. Therefore, the intuitive sentiment is to avoid TM.
I’m not going to vigorously argue against this line of thinking, except that the mania surrounding electric vehicles may end up helping Toyota over the long run. You see, investors have seemingly piled into everything electric vehicle (EV) related. But as I mentioned recently in an analysis for the industry, the broader transition to EVs could take more time than the bulls anticipate.
If so, Toyota makes perfect sense as one of the global stocks to buy. If combustion cars stay relevant, Toyota enjoys a powerful reputation for quality and reliability at low prices. However, it’s also pressing into EVs with its own electric-powered cars along with investments in solid-state batteries.
Global Stocks to Buy: ASML (ASML)
In the first few months of the Covid-19 pandemic, it became readily apparent that disrupted supply chains would cause myriad problems across most industries. At the same time, highly demanded products like semiconductors would spark a cynical demand boost for specialized producers. ASML (NASDAQ:ASML) was one such name, becoming an extraordinary beneficiary among global stocks to buy.
However, with global recession fears rising, many investors have soured on ASML stock. On a year-to-date basis, shares have slipped over 22% year-to-date (YTD), raising serious concerns. Essentially, as inflation dramatically boosts prices of all consumer goods, people will be reluctant to spend on discretionary items. That could start impeding progress for the semiconductor industry.
At the same time, the modern world needs computer chips like we humans need water. Moreover, ASML is a leader in lithography, enabling companies to print complex patterns on silicon wafers. It’s no exaggeration to say that ASML is the lifeblood of modern societies, thus drawing intrigue for the company.
If 2020 was the year of the telehealth industry and 2021 was the year of vaccine developers, then it stands to reason that 2022 could end up being the year of oil companies. To the chagrin of environmentalists, hydrocarbons have become a geopolitical spotlight, first from the Covid-19 impact and later from the war in Ukraine.
Cynically, circumstances bode well for Petrobras (NYSE:PBR), the state-owned Brazilian petroleum firm. Simply put, oil prices are likely to rise higher. The U.S. Federal Reserve doesn’t appear to have the political will to address the unprecedented expansion of the M2 money stock, let alone the M1 money stock. That’s going to buttress inflation. And Europe discussing ways to phase out Russian oil imports presents huge pricing implications.
To be fair, soaring oil prices could reach an upside threshold that, rather than begetting even higher prices, could result in a global recession. However, Petrobras stands as a geopolitical hydrocarbon alternative, if only because Brazil isn’t Russia.
Global Stocks to Buy: British American Tobacco (BTI)
To be upfront, British American Tobacco (NYSE:BTI) clearly has a cynical angle. According to an international study, “the propensity to become a smoker increases significantly during an economic downturn.” Therefore, BTI could turn out to be an effective hedge among global stocks to buy if the markets get squirrely. People may turn to tobacco products to relieve their stress — and you can figure out the rest.
However, BTI also commands a less ghoulish narrative and that is its transition to e-cigarettes or vaporizers. While e-cigs aren’t safe products, the Centers for Disease Control and Prevention noted that they are less harmful than regular cigarettes. So, you might look at BTI as a mitigated vice play among global stocks to buy.
Also, BTI features several sleek e-cigs and vapes, which have come in vogue recently. Understandably, the full-size vaporizers — the ones that could seemingly double as a radio to call in an airstrike — were deemed too bulky for practical everyday use. Thus, even on product mix, BTI is firing on all cylinders.
Toronto-Dominion Bank (TD)
If you thought the U.S. was having trouble with inflation, you can rest assured knowing that misery loves company. Our neighbors up north are also suffering from rising prices. Indeed, the annual inflation rate rose to 6.7% for Canada in March, blowing past economists’ expectations. Therefore, it might pay to direct your global stocks to buy to companies that could benefit from rising rates such as Toronto-Dominion Bank (NYSE:TD).
Now, let me be the first to say that I believe TD to be an extremely risky idea. The bullish narrative for the financial institution is that Canada’s central bank will eventually raise rates to combat inflation. That’s a reasonable assumption, though policymakers must be careful not to overdo it since it could lead to a recession. If that happens, I’m not sure if a banking firm is the best place to be for global stocks to buy.
However, if Canada succeeds in a soft landing — and it will also be hoping that the U.S. does the same — Toronto-Dominion Bank could be interesting. If you have the blood for speculation, you might want to check it out.
Global Stocks to Buy: Airbus (EADSY)
Saving arguably the riskiest idea for this list of global stocks to buy for last, Airbus (OTCMKTS:EADSY) can go either way. On the bearish front, the aforementioned fears of recession will surely impact travel, both domestic/regional and international. As well, if the inflation crisis doesn’t end soon, rising energy costs will make air travel expensive, perhaps prohibitively so for many households.
Still, there are two sides to every coin. The bullish angle comes down to a concept labeled revenge travel. It’s analogous to retail revenge, but for the friendly skies. Basically, with people being cooped up in their homes for two years or so, they’re ready to reclaim their humanity. Part of that of course is engaging in social experiences — a factor that was nullified due to Covid-19.
Although pent-up demand is a powerful factor, it must go up against economic realities. As the Washington Post recently detailed, higher gasoline and flight ticket prices are forcing travelers to rethink their summer vacation plans. EADSY stock could fly higher, but it’s probably best for speculators.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.