A Barron’s article appeared at the end of 2023 discussing why Turkey could be one of the biggest emerging markets opportunities in 2024. So far, the iShares MSCI Turkey ETF (NASDAQ:TUR) is up 14.3% year-to-date (YTD), more than double the S&P 500.
“A broader argument for Turkish stocks rests on valuation and positioning. Turkey is dirt cheap relative to other emerging markets, at an average price-to-forward-earnings ratio of 3.9, and somewhat cheap relative to its own history,” Barron’s contributor Craig Mellow reported on East Capital senior consultant Emre Akcakmak’s comments about Turkish stocks. “This is the fifth time over the past 15 years that we have been close to these levels, and every time we have seen a bump.” The question is whether they can keep going.
Turkey is one of three emerging markets whose name begins with T. The other two are Thailand and Taiwan. To spread the risk around, here are three stocks to buy, one from each country.
BİM Birleşik Mağazalar (BMBRF)
BİM Birleşik Mağazalar (OTCMKTS:BMBRF) is one of the largest publicly traded etail stocks in Turkey. It started in 1995 with 21 stores. As of Sept. 30, 2023, it had 12,046 stores in Turkey, Morocco and Egypt. It is the pioneer of discount stores in Turkey.
In Q3 2023, it generated 61% of its sales from private label products, with the remainder coming from branded products and exclusive one-time offers. Its revenue in the third quarter was 74.41 billion Turkish lira (USD $2.39 billion), with an EBITDA (earnings before interest, taxes, depreciation and amortization) of 6.67 billion Turkish lira (USD $214 million).
In addition to its discount stores, it started File in 2015. File stores provide a shopping environment that combines a supermarket and a department store, similar to Walmart (NYSE:WMT). Today, the subsidiary has 223 stores in 26 cities, and BMBRF opened four more File stores in the third quarter.
BIM is the largest holding in TUR with a weight of 7.07%, so for investors looking for emerging markets opportunities, both BIM and TUR seem to be good choices right now.
Airports of Thailand (AIPUY)
Airports of Thailand (OTCMKTS:AIPUY) is the fourth-largest holding of the iShares MSCI Thailand ETF (NYSEARCA:THD) with a weight of 5.09%. The Bangkok-based company went public in September 2002. It was spun off from the Airport Authority of Thailand, a state enterprise. The Thai government’s Ministry of Finance owns 70% of the public company.
As its name suggests, the company operates 39 airports in Thailand, including two in Bangkok, Thailand’s capital. In Q1 2024, its airports had 28.9 million passengers, 25.5% more than in Q1 2023. Approximately 58% of the passenger traffic was international, with the remaining 42% domestic.
Departure Passenger Service Charges (PSC) and Concession Revenues (CCR) accounted for 70% of its Q1 2024 revenue of 48.1 billion Thai baht (USD $1.34 billion). Its EBITDA profit in the third quarter was 9.37 billion Thai baht (USD $260 million). That was 186% higher than in Q3 2023.
Regarding capacity, Suvarnabhumi Airport in Bangkok has the highest, with 51.7 million passengers in 2023. Several projects are underway at the airport that will grow its capacity by 2028. With Thailand becoming an increasingly more visited location by foreign nationals, investing in its airports is another one of the emerging markets opportunities to take advantage of.
ASE Technology (ASX)
The most obvious choice for Taiwanese stocks in the iShares MSCI Taiwan ETF (NYSEARCA:EWT) is the fund’s top holding, Taiwan Semiconductor Manufacturing (NYSE:TSM). The company manufacturers Nvidia’s (NASDAQ:NVDA) artificial intelligence (AI) chips.
However, ASE Technology Holding (NYSE:ASX), the ninth-largest position in EWT with a 1.53% weight, presents a more interesting opportunity. ASE stands for Advanced Semiconductor Engineering, which is one of three operating units under the holding company’s umbrella.
“ASEH develops and offers complete turnkey solutions covering front-end engineering test, wafer probing, IC packaging and modules, materials, final test, system and board level integration and, electronic design and manufacturing services (EMS),” states its company website.
Of the 20 analysts covering its stock, 10 rate it a Buy, with the highest target price at $12.11 which is 27% higher than where it’s currently trading. The current analyst estimate for the company’s earnings in 2024 is 61 cents a share and 84 cents in 2025. It trades at less than 16x 2024 earnings-per-share (EPS) and 12x its 2025 earnings. ASX shares are up nearly 28% over the past year and 121% over the past five years.
On the date of publication, Will Ashworth did not hold (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.
