In this article, we discuss the 10 best global stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Global Stocks To Buy Now.
Investors are optimistic that global markets will continue to rise in 2022, as they did the previous year. According to Refinitiv data published in the Financial Times, the FTSE All-World stock index jumped 16.7% in dollar terms in 2021, outperforming the previous year’s gain of 14.1%. In 2021, global stocks rose by double digits as monetary policies from many of the world’s top central banks, as well as the government’s stimulus programs, pushed global financial markets higher.
Why Invest in Global Stocks?
According to market analysts, one of the options for investors looking to diversify their portfolio and profit from the global surge of rising economies is to invest in global equities. Foreign stocks provide investors with a variety of fresh alternatives, like exposure to developing markets outside of the United States. According to Principal Global Investors chief strategist Seema Shah, one of the catalysts driving growth in emerging markets is the expanding reopening trade post-pandemic, backed by governments’ ongoing efforts to accelerate vaccination rates. Furthermore, UBS analysts are bullish on global economic growth and forecast a 10% increase in global corporate earnings in 2022.
We chose global stocks that are headquartered outside of the United States and market their products and services on a global scale.
These stocks were chosen based on the fundamentals of their businesses and analyst ratings.
Best Global Stocks To Buy Now
10. Nestlé S.A. (OTC:NSRGY)
Number of Hedge Fund Holders: 4
Nescafé maker Nestlé S.A. (OTC:NSRGY) boasts one of the largest portfolios of food and beverage brands globally. The Swiss packaged foods giant sells over 2,000 brands internationally including Cerelac, Cheerios, KitKat, Nespresso, and Purina. Nestlé S.A. (OTC:NSRGY) plans to boost its e-commerce sales to 25% by 2025, up from 20% in 2020. The Swiss food conglomerate intends to increase its digital marketing investment to 70% by 2025, up from 47% in 2020 to increase its online presence.
In the third quarter, 4 hedge funds in the database of Insider Monkey reported owning stakes in Nestlé S.A. (OTC:NSRGY), worth $1.75 billion. Pennsylvania-based investment firm Gardner Russo & Gardner is the leading stakeholder of the company, with 9.5 million shares worth $1.14 billion.
Nestlé S.A.’s (OTC:NSRGY) revenue in the last nine months totaled CHF 63.3 billion, an increase of 2.2% year over year. In addition, the Swiss company reported a 7.6% increase in organic growth rate during the period. Coffee was a major contributor to the high organic growth rate, driven by growing sales for the company’s three major brands Nescafé, Nespresso, and Starbucks.
Barclays analyst Warren Ackerman maintained an Overweight rating on Nestlé S.A. (OTC:NSRGY) and increased his price target for the stock to CHF 135 from CHF 130 on December 9.
Nestlé S.A. (OTC:NSRGY), along with Sea Limited (NYSE:SE), Nokia Corporation (NYSE:NOK), Toyota Motor Corporation (NYSE:TM), and Baidu, Inc. (NASDAQ:BIDU), is one of the best global stocks to buy now, according to market analysts.
In the Q2 2021 investor letter of Semper Vic Partners, the fund mentioned Nestlé S.A. (NYSE:NSRGY) and discussed its stance on the firm. Here is what the fund said:
“I believe that Nestlé shares are well-positioned in our portfolios based on its global growth potential. Nestlé’s global growth potential is a dividend from their trusted consumer brands’ 100-year command presence in over 100 countries. Over these years, Nestlé has developed trusted and cherished iconic brands. For instance, Nestlé has over 30 brands that have over $1 billion of annual turnover. Nestlé benefits from a vast Total Addressable Market (TAM) available through developing and emerging market consumers shifting from subsistence economies to the introduction of market-based economies. Nestlé benefits from its market leadership in two key categories that evidence extremely high brand loyalty – global pet food/care and global premium coffee (led by Nestlé’s globally leading Nespresso).
More importantly, Nestlé has a culture of long-term investing. Nestlé has long excelled at securing new markets and rolling out new products, often adjacent to long-standing brands. They also have a history of internal innovation (e.g., behind launch of new brand’s single-service coffee platform, as a result of external acquisition of companies whose brands, technology, patent, manufacturing, route-to-market, adjacent category presence, etc., offer powerful longterm returns on incremental investments deployed to meet demands of growing consumers and growing affordability for those consumers of Western-style goods and services).
Like Berkshire Hathaway, Nestlé management is driven to find ways to reinvest Nestlé’s massive annual free cash flow into new products, new geographies, and adjacent categories. They are aided in this search by their extensive global network of an extraordinary management team. Nestlé’s senior most management are an extraordinary team of multi-national, multilingual (most of top 100 executives speak at least three languages), and multi-cultural. Quite simply, they know their way around the globe through global experience in ways that ought to empower Nestlé shareholder’s management teams to obtain for Nestlé shareholders “their unfair share” of future growth amongst categories serviced by Nestlé’s leading, trusted consumer brands.
Nestlé’s management added enormous value over the past decade. First and foremost, they were disciplined enough to retain their long-standing and sizeable holding in shares of L’Oréal (whose market value over the past eight years has moved from $22 billion to over $59 billion). While many investors believe that Nestlé should have divested L’Oréal shares, Nestlé instead has held firm, allowing their support of management to allow L’Oréal to reach further with investments intended for long-term results even if investment spending to do so burdened near-term reported profits. (Over these years, where activists suggested divestiture, the dollar value of Nestlé’s stake in L’Oréal has advanced by over $37 billion in value.) Second, Nestlé’s management strategically restructured their Galderma subsidiary, prior to selling the business for what I believe to be billions of dollars more than what they would have received had they not embarked upon such restructuring under the leadership of Nestlé’s recently appointed new Chief Executive Officer, Ulf Mark Schneider. Third, Nestlé has partnered with countless private equity pools to which they have sold legacy businesses in ice cream, confectionary frozen foods, etc. These partnerships are run separately but provide Nestlé with extraordinary ability to participate through equity holdings alongside of buyers of Nestlé divisions that had been rightfully deemed non-strategic.
One area of redeployment of cash raised from the above-described restructuring, involved investments in younger food and beverage industry participants involving venture capital investments in digitally enabled and disruptive food and health start-up ventures. During the Pandemic, Nestlé’s willingness to have made such venture investments provided reward when several of their venture portfolio companies sought to sell themselves. Nestlé’s willingness to invest early on in such ventures gave Nestlé the only seat at the auction table that could possibly have been filled as their potential competitors were unable to act due to the inability to due diligence businesses offered for sale during the disruption in the world caused by COVID.
Nestlé’s sole ability to due diligence these venture capital-funded investments, which they knew well as a result of their long-standing investment presence, allowed Nestlé to acquire a handful of strategic investments with the foreknowledge that other potentially interested parties could not have had. More importantly, potential competitive bidders could not due diligence such investments as they were unable to travel and visit due to COVID restraints. Nestlé’s familiarity left them as sole contender when it acquired, for over $2 billion, Aimmune, the world’s leading peanut allergy vaccine. Ironically, just at the same time that the FDA awarded Aimmune with the sole rights to advertise and market their product’s ability to protect against this often fatal allergy, Nestlé was given the opportunity to purchase this important new line of business.
Nestlé similarly was able to acquire Freshly, a leading e-commerce-based food solutions company. Nestlé knew of the business dynamic as a result of their time spent as board members of Freshly during its venture capital funding era. Nestlé was familiar with management, with kitchens, etc., which they believe created the competitive advantage which made it an attractive investment. Others, without prior knowledge, were at a substantial disadvantage when it came to obtaining assurances required of traditional due diligence prior to substantial investments such as Nestlé made in Freshly. All totaled, since the Pandemic, Nestlé has sold businesses for proceeds of over $5 billion while acquiring interesting venture phase investments for several billion dollars and while investing in greenfield and expansionary projects in support of Nestlé’s traditional businesses in excess of $5 billion.
Nestlé’s ability to weather and, indeed, take advantage of disruptions caused by the Pandemic supports my long-held belief that Nestlé is, indeed, a combination enterprise – equal parts fixed income and equal parts venture capital. Nestlé’s characteristic as a fixed-income investment reflects the extraordinary generation of free cash flow that its long-standing trusted brands generate. Such free cash flow from existing and often mature Western markets resemble fixed income, bond-like returns from previously established regions of the world. The free cash flow has been invested heavily back into Nestlé’s business…” (Click here to see the full text)
9. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 10
Toyota Motor Corporation (NYSE:TM) is a Japanese car manufacturer that continues to thrive in the global automobile market. The carmaker sold 2.3 million vehicles in the US alone in 2021.
Toyota Motor Corporation (NYSE:TM) aims to sell 3.5 million EVs per year by 2030, which is why the Japanese automaker seeks to invest $35 billion in developing a full lineup of 30 battery-powered electric vehicles by 2030.
Ken Fisher’s Fisher Asset Management is one of the leading Toyota Motor Corporation (NYSE:TM) stakeholders as of September 2021, with an $853 million position in the company. There were 10 hedge funds in the Q3 database of Insider Monkey that was bullish on the stock.
Reporting its Q3 earnings result on November 4, Toyota Motor Corporation’s (NYSE:TM) revenue came in at $66.4 billion, beating revenue estimates by $3.8 billion.
8. HSBC Holdings plc (NYSE:HSBC)
Number of Hedge Fund Holders: 10
HSBC Holdings plc (NYSE:HSBC), one of the world’s largest banks, offers retail banking products, investment management, credit and lending services, and digital banking services globally.
The UK-based banking firm pays its shareholders an annual dividend of $1.10 per share. Also, in the third quarter of 2021, HSBC Holdings plc’s (NYSE:HSBC) pre-tax profit increased 75.8% year over year to $5.4 billion. The company’s total revenue in Q3 2021 was $12 billion.
On December 12, Deutsche Bank analyst Robert Noble upgraded HSBC Holdings plc’s (NYSE:HSBC) rating to Hold from Sell and increased his price target for the stock to GBP 480 from GBP 390.
Based on the Q3 hedge fund data tracked by Insider Monkey, 10 funds were long HSBC Holdings plc (NYSE:HSBC), with Renaissance Technologies as the largest company stakeholder, owning a $96.3 million position.
7. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 11
STMicroelectronics N.V. (NYSE:STM) is a Swiss semiconductor company that manufactures microchips for a variety of applications such in the industries of automotive, industrial, electronics, communications, and IoT. One of the biggest clients of STMicroelectronics N.V. (NYSE:STM) is iPhone maker Apple Inc. (NASDAQ:AAPL).
In the third quarter of 2021, STMicroelectronics N.V.’s (NYSE:STM) revenue came in at $3.20 billion, an increase of 19.9% year over year. The Swiss company saw strong global demand for its personal electronics semiconductors.
STMicroelectronics N.V. (NYSE:STM) was given an Overweight rating by Morgan Stanley analyst Dominik Olszewski. According to Olszewski, the Swiss semiconductor company has an “attractive portfolio positioning” for growth markets such as silicon carbide and image sensors. Dominik Olszewski set a $50 price target for the stock.
ZWEIG DIMENNA PARTNERS is the largest stakeholder of STMicroelectronics N.V. (NYSE:STM) as of September 2021, with 442,323 shares worth $19.3 million. According to Insider Monkey’s Q3 data, 11 elite funds were long STMicroelectronics N.V. (NYSE:STM), compared to 13 in the preceding quarter.
Just like Sea Limited (NYSE:SE), Nokia Corporation (NYSE:NOK), Toyota Motor Corporation (NYSE:TM), and Baidu, Inc. (NASDAQ:BIDU), STMicroelectronics N.V. (NYSE:STM) is among the foreign stocks that are gaining traction in 2022.
“STMicroelectronics has a goal of becoming carbon-neutral by 2027, and in 2020 reported that their greenhouse gas emissions were down 19% over the previous year. In 2020, STMicroelectronics was the only semiconductor company with targets approved by the Science Based Targets Initiative for limiting warming to 1.5 degrees Celsius, and their 2027 net-zero goal is recognized as one of the most ambitious in the industry. As greenwashing presents a growing concern within the ESG community, and as more and more funds engage in re-branding exercises that have little to do with pursuing sustainable investment practices among others, our definition of sustainability includes financial sustainability, most often demonstrated by intelligent capital allocation leading to solid cash flows that can sustain a business without resorting to excessive leverage.”
6. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 15
SAP SE (NYSE:SAP) is a German enterprise software provider. The company develops applications and software such as CRM, cloud-based supply chain management, and business technology platform. SAP SE (NYSE:SAP) boasts over 200 million cloud user base and partners with 22,000 companies globally.
SAP SE’s (NYSE:SAP) revenue increased 5% year over year to EUR 6.8 billion in the third quarter of 2021, driven by strong growth in its cloud division. The software company’s cloud-related sales reached EUR 2.4 billion in the third quarter, up 20% over the previous year.
On December 13, UBS analyst Michael Briest raised SAP SE’s (NYSE:SAP) rating from Neutral to Buy, citing that the reacceleration of cloud growth will result in a rebound of the stock in 2022. Briest increased his price target for the stock to EUR 147 from EUR 130.
As for the third quarter, 15 hedge funds reported owning stakes in SAP SE (NYSE:SAP), worth $1.53 billion. In comparison, 17 hedge funds disclosed ownership of stakes in the company in the previous quarter.
In the Q2 2021 investor letter of Polen Capital, the fund mentioned SAP SE (NYSE:SAP) and discussed its stance on the firm. Here’s what the fund said:
“During the second quarter, the leading absolute contributors to performance (includes) SAP. German enterprise software company SAP was a leading contributor to Portfolio returns in the quarter. Over the last six months, SAP rolled out a new simplified commercial offering aimed at making it easier for their customers to transition their core enterprise resource planning software to the cloud. “Rise with SAP” will encourage customers to consider moving certain workloads to new cloud-enabled software. In many cases, SAP customers standardized business processes on SAP software over decades. Contemplating and enacting transformational change is a huge undertaking for these customers. Historically, transitioning to the cloud involves many third-party helpers, so having a single, trusted partner to lead the conversation, design the road map, and own the execution is helpful. Further, as customers shift to the cloud, more peripheral workloads can be handled by SAP, thereby potentially increasing the scale of its relationship with certain customers. Not all legacy customers will adopt SAP’s cloud software, but there could be meaningful performance benefits (quicker innovation, more agility, and mobility, etc.) and cost savings for those that do.
In addition, new customers are coming aboard the SAP cloud platform, which we view as a testament to its leading capabilities. This initiative could drive cloud software revenue growth greater than 20% in the coming years, some of which will cannibalize existing on-premise software sales. That said, the potential net result is attractive and durable growth. We think SAP is capable of double-digit earnings growth over the coming five-year period.”
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Disclosure. None. 10 Best Global Stocks To Buy Now is originally published on Insider Monkey.