One question that consistently comes across my desk is why we maintain a global value portfolio when growth stocks and U.S. markets are clearly dominating the investment landscape. The answer, quite frankly, is that’s exactly why we’re doing it.
However, this dominance comes at a price. U.S. stocks are trading at significantly higher multiples of earnings, asset values, and dividends compared to many international markets, where valuations are often half of what we’re seeing domestically. While these markets may be out of favor, history has consistently shown that the most successful investors are those willing to venture where others fear to tread.
Yes, there’s always the possibility that buying into dire situations could result in massive losses if the world truly implodes. But at that point, your stock portfolio’s performance would likely be the least of your concerns.
This global approach isn’t new. John Templeton pioneered this strategy, famously launching his career by borrowing $10,000 to purchase a portfolio of NYSE-listed stocks trading under $1. While some went bankrupt, the portfolio quadrupled over several years, marking the beginning of his illustrious career. Templeton went on to become a trailblazer in global value investing, achieving impressive compounded returns over a long career.
Currently, finding stocks in the U.S. that trade below asset value, maintain strong balance sheets with minimal debt, offer reasonable yields, and remain profitable is increasingly challenging. In contrast, Europe and Japan present numerous opportunities meeting these criteria. We’ve even identified select Chinese companies that qualify under our stringent standards.
New Portfolio Addition: Peabody Energy Corporation (Ticker: BTU)
Despite our international focus, our latest addition is a U.S.-based company in perhaps the most unloved sector globally – coal. Peabody Energy Corporation, headquartered in St. Louis, operates globally, serving customers in 25 countries with both thermal and metallurgical coal.
Their recent $3.8 billion acquisition of Anglo-American’s Australian steelmaking coal assets is transformative, potentially tripling their metallurgical coal production by 2026. While developed markets are transitioning away from thermal coal, demand remains strong in emerging markets, particularly China and India. Additionally, coal still generates approximately 20% of U.S. electricity.
Peabody’s fundamentals are compelling:
- Annual revenue exceeding $1 billion
- Substantial free cash flow
- Strong liquidity
- Manageable debt levels
- 1.63% dividend yield
- Trading at approximately 5x earnings
- 75% of tangible book value
While the coal industry faces regulatory and environmental headwinds in Western markets, global demand persists, particularly in emerging economies. The Perfect Stock Portfolio continues to focus on dividend collection and deeply undervalued stocks, maintaining our strategy of beating the markets through patient, value-oriented investing.
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
