If you’re looking for new growth opportunities, it would be wise to consider emerging market stocks. They could be just the ticket to power your growth portfolio into 2024.
Emerging market stocks are those that represent companies that are operating in developing economies. These economies have the potential for rapid economic growth and an expanding middle class with increased discretionary income. These countries are also fertile territory for companies that work to build roads, water and sewage systems, power grids and other infrastructure improvements.
And remember, emerging markets can represent some of the biggest and most densely populated nations on the planet. For example, China, India and Brazil all qualify as emerging markets.
I also like the idea of investing in emerging markets because it’s a great way to diversify your portfolio. Many investors put too much of a focus on U.S.-based stocks. Those are important, but a global perspective can give you a window to growth when the U.S. market faces headwinds.
Diversification in the number of equities and the stocks is your best tool to prevent unexpected portfolio losses.
We’ll use the Portfolio Grader today to look at the best emerging markets stocks you can buy. The potential for higher returns and untapped market potential makes each of these an attractive choice.
Nu Holdings (NU)
Nu Holdings (NYSE:NU) is a fintech company that operates a banking and financial services platform in Brazil, Mexico and Columbia to more than 89 million customers. It’s now aiming to take hold on the greater Latin American financial market, which is estimated to be worth $1 trillion.
The company is seeing impressive growth, with the customer base growing from 70 million a year ago to its current 89.1 million. Customer balances grew from $9.7 billion a year ago to $15.4 billion.
Overall, Nu Holdings saw revenue of $2.1 billion in the third quarter, up 54% from a year ago. Net income rose from $7.8 million a year ago to $303 million.
NU stock is ideal for investors looking for a strong finance stock in emerging markets. The stock is up 104% this year and gets an “A” rating in the Portfolio Grader.
Li Auto (LI)
Li Auto (NASDAQ:LI) is my choice for the best electric vehicle stock in an emerging market. Li is growing rapidly in China.
While it’s not in a position to challenge Tesla (NASDAQ:TSLA) for supremacy, it seems to be taking a bite out of its bigger competitor.
Li reported deliveries of 41,030 vehicles in November, marking the second consecutive month it topped the 40,000 mark. Deliveries were up 172% from a year ago.
Meanwhile, in November, Tesla saw its Chinese sales fall 17% to 82,432 cars.
Li appears to be the best of the Chinese-made EV stocks, and I’m still bullish on China’s economy despite the country’s achingly slow recovery from the Covid-19 shutdowns. Its revenue in the third quarter came in at $4.61 billion, which is an increase of 271% from a year ago.
StoneCo (STNE)
StoneCo (NASDAQ:STNE) is another fintech company. It serves small- and medium-sized businesses in Brazil, where it has more than 2.5 million users that it helps to interact with customers.
The company’s platform connects businesses to their customers with in-store platforms, online and mobile channels. Its strategy involves creating strong relationships and expanding its array of financial services.
In 2023, the business model was a big winner. Revenue of $647.1 million was up nearly 28% from a year ago. Net income was up a whopping 302% from a year ago.
StoneCo stock is up 92% this year, including a massive 78% gain in the last three months. STNE stock gets an “A” rating in the Portfolio Grader.
Itau Unibanco Holding (ITUB)
Itau Unibanco Holding (NYSE:ITUB) is yet another Brazilian fintech stock. The company provides retail banking, wholesale banking, commercial and private financial services.
It’s the second-largest bank in Latin America and has branches in Asia, Europe and North America.
And it has its sights set on bigger and better things. In December, the company announced that it would begin buying and selling cryptocurrencies through Ion, its investment platform. The company rolled out the effort to clients on its Ion app but plans to make the option available to all customers.
The first nine months of 2023 showed revenue of $24.7 billion, up 11% from a year ago. Net income was up 9%.
Itau stock is up 48% this year. It gets an “A” rating in the Portfolio Grader.
EHang Holdings (EH)
EHang Holdings (NASDAQ:EH) is a Chinese company that makes electric aircraft that take off and land vertically. And it does it without a pilot.
The company just announced successful debut flight demonstrations in Guangzhou and Hefei of its EH216-S pilotless passenger-carrying aircraft.
The company is lauding the effort as a new way of air mobility and a way for tourists to get a unique view of city landmarks. The city of Hefei plans to facilitate the purchase of at least 100 of the aircraft, pledging $100 million to the effort.
EHang is the first company to obtain a certificate for unmanned electrical vertical take-off and landing flights in China. It collaborates with Wings Logistics Hub to develop urban air transportation in the UAE, Middle East, and North Africa.
Third-quarter revenues of $3.9 million were up 248% from a year ago, while the company’s operating loss of $5 million was an improvement of 5% from last year.
EH stock is up 101% in 2023 at it gets a “B” rating in the Portfolio Grader.
D-Market Elektronik Hizmetler ve Ticaret (HEPS)
D-Market Elektronik Hizmetler ve Ticaret (NASDAQ:HEPS), also known as Hepsiburada, is an e-commerce company operating in Turkey.
Its customers can buy electronics, fashion, home goods, sports equipment, outdoor products and personal care products.
The company has over 61 million members and over 101,000 merchants using the platform.
Besides its e-commerce and delivery segments, Hepsiburada also operates financial services through a debit card, buy-now-pay-later options, and shopping loans.
Turkey represents the world’s 19th-largest economy, and its GDP grew at 5.6% in 2022 – an impressive number. While growth is less this year because of the impact of damaging earthquakes in February 2023, GDP growth is expected to be 3.2% this year and 4.3% in 2024.
Revenue in the third quarter was up 52% from a year ago to 8 billion Turkish lira ($270 million), and the number of orders in the quarter increased by 55.1% to 27 million.
HEPS stock is up 165% in 2023 and gets an “A” rating in the Portfolio Grader.
MakeMyTrip Limited (MMYT)
MakeMyTrip Limited (NASDAQ:MMYT) is an online travel company operating in India. The company provides customers with everything they need to travel, including airline tickets, hotel reservations, rail and bus tickets, and travel packages in India and internationally.
The company has three brands operating in India: MakeMyTrip, Goibibo and Redbus. It also recently entered the lucrative Gulf market, providing travel packages and hotel reservations.
India is the world’s most populous country at 1.4 billion, so the potential market for MakeMyTrip is huge. And it also has one of the fastest-growing economies, with GDP growth of 7.2% that is nearly twice the average of emerging market economies, according to the World Bank.
The company is seeing that growth reflected in its earnings reports. Its revenue in the fiscal second quarter (ending September 30) was $168.7 million, up 28.5% from a year ago. The company also turned a profit of $2 million after posting a loss of $6.7 million in the same quarter a year ago.
MMYT stock is up 70% in 2023 and gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier and the InvestorPlace Research staff member primarily responsible for this article had long positions in LI. Neither held (either directly or indirectly) any other positions in the securities mentioned in this article.
