Market Overview

Three International Stocks Worth a Look Now (GMK, SODA, LULU)

Here is a quick look at three international stocks -- Gruma SAB (NYSE: GMK), SodaStream International (NASDAQ: SODA) and Lululemon Athletica (NASDAQ: LULU) -- that have double-digit returns on equity and double-digit long-range earnings per share (EPS) growth forecasts. Each is up more than 15% over the past year as well.

Gruma

This maker of tortillas and other snack and food products has a market capitalization of about $1.7 billion and it is based in San Pedro Garza Garca, Mexico. The return on equity of more than 51 percent. The price-to-earnings (P/E) ratio is less than the industry average, and the long-term EPS growth forecast is more than 43 percent. The number of shares sold short is the lowest it has been since May.

Both of the analysts surveyed by Thomson/First Call who follow the stock recommend holding shares, and they have for at least three months. The share price has overrun the current mean price target, meaning that until the analysts change their price targets, essentially there is no guidance on upside potential.

Shares reached a multiyear high in October but pulled back after Archer Daniels Midland (NYSE: ADM) sold its stake in Gruma. However, the share price is still more than 55 percent higher year to date, including up about 12 percent in the past month. The stock has outperformed ADM and the S&P 500 over the past six months.

SodaStream

This Israeli purveyor of home beverage carbonation systems has a market cap of more than $827 million and its products have proved popular with holiday shoppers. The forward earnings multiple is about 15.5, and the long-term EPS growth forecast is more than 56 percent. The return on equity is more than 17 percent. But note that short interest is about half the float. That is the highest number of shares sold short since July.

All but two of the nine analysts surveyed recommend buying shares; four of them rate the stock at Strong Buy. Their mean price target represents about 17 percent potential upside, a level the stock has not seen since August 2011.

SodaStream shares are up more than 31 percent from a year ago. The share price rose in November after the company announced a deal with Campbell Soup (NYSE: CPB), though shares currently are trading at about the same price they were 90 days ago. Still, the stock has outperformed the Nasdaq and the S&P 500 over the past six months.

Lululemon

This athletic apparel maker is headquartered in Vancouver, Canada, sports a market cap of almost $11 billion, and it recently posted better-than-expected third-quarter results. The P/E ratio is higher than the industry average, but so is the operating margin. The long-term EPS growth forecast is about 29 percent and the return on equity is more than 36 percent. But short interest is about 22 percent of the float.

Half of the 22 analysts polled recommend buying shares, though only one recommends selling. They believe the stock has some room to run as their mean price target is more than nine percent higher than the current share price. That target would be a new multiyear high.

Shares have traded mostly between $66 and $74 for the past eight weeks but now are still more than 58 percent higher year to date. Over the past six months, the stock has outperformed competitors Nike (NYSE: NKE) and Under Armour (NYSE: UA).

Posted-In: ADM archer daniels midland campbell soup Gruma Lululemon Athletica Nike SodaStream under armourLong Ideas Short Ideas Trading Ideas Best of Benzinga

 

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