Author Topic: Buying opportunities in low CAPE ratio countries?  (Read 681 times)

Valuemane

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Buying opportunities in low CAPE ratio countries?
« on: March 15, 2020, 01:23:57 PM »
Watching the markets of various Asian and European countries got me thinking that maybe there's an opportunity.

Looking at the website below (or open the attachment for the related chart), it looks look various developed market Asian and European countries are cheap based on various measures. Specifically, Italy, Spain, Singapore, Austria, South Korea, and Portugal are arguably "cheap". Obviously, they're cheap because they've been hard hit by COVID-19, they had weak economies prior to COVID-19, etc.

https://www.starcapital.de/en/research/stock-market-valuation/

Has anyone come across interesting ideas in these six countries?

Also, what do y'all think of the following strategy:
Buy a basket of 20-30 stocks in each of these "cheap" markets
Base the stocks that you buy purely off of the lowest enterprise value / EBITDA multiples
Make sure the stocks that you buy are fairly liquid by excluding the lowest 50% percentile based off of market cap
« Last Edit: March 15, 2020, 01:26:01 PM by Valuemane »


rb

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Re: Buying opportunities in low CAPE ratio countries?
« Reply #1 on: March 15, 2020, 02:43:12 PM »
I have.

Most of those countries I wouldn't touch.

Singapore is full of shady companies. Spain and Italy is full of crappy companies. The actual good ones were quite expensive and didn't come down very hard.

Austria is the most interesting. But you gotta be careful. There's a lot of CEE companies listed in Austria and Austrian companies have a lot of exposure to CEE so know what you buy. I've been looking almost daily at FLU. I made a boneheaded decision years ago not to buy it at 8. It come down a lot, but i still have a hard time to pull the trigger at 22 when i could have had it at 8.

NewValueinvestor

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Re: Buying opportunities in low CAPE ratio countries?
« Reply #2 on: March 19, 2020, 06:54:30 PM »
I have bought a few of those EM stocks, and looking to buy more. I've bought 1 russian stock and plan to buy some more. I know there's tons of issues, people talk about rule of law and corruption, but you just discount it with a margin of safety.

Some ideas that I'm looking at or bought:
Russia:
Rushydro - State owned hydroelectric operator, trades at a fraction of book, pays a lot of dividends and holds a lot of cash on it's books
Sberbank - really fantastic bank that's trading less than tangible book.

South Korea:
KT corporation - massive oligopoly telecom that's super cheap.

I think the you don't really get extremely cheap prices without extreme market sentiments.

just my 2c