Stocks to buy

As the markets face macroeconomic headwinds, it’s time to be cautiously optimistic. The first step is to ensure capital preservation. That can be achieved through investment in blue-chip stocks, investment grade bonds, and gold. Within the relatively aggressive portfolio, I would look at some global stocks to buy.

Global diversification makes sense as some economies and sectors will grow faster than the others. Furthermore, there are promising growth stories from emerging markets that can be long term value creators.

It’s also worth noting that global stocks have not been immune to macroeconomic headwinds. This has translated into several fundamentally strong names trading at undervalued levels. I believe that several global stocks to buy can deliver 100% returns in the next 12 months. This scenario is very likely if policymakers shift towards expansionary policies in the second half of 2023.

Let’s therefore discuss three global stocks to buy for a sharp rally in the coming quarters.

Li Auto (LI)

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Li Auto (NASDAQ:LI) stock has increased by 15% for year-to-date 2023. A big part of the rally is still to come as business developments remain positive.

For the first quarter of 2023, Li Auto reported delivery growth of 65.8% on a year-on-year basis to 52,584. I believe that robust delivery growth will continue in the coming quarters. A key reason to be bullish is an attractive line-up of new models.

Li Auto commenced delivery of Li L7 in Q1 2023. The company expects to start deliveries of Li L7 Air and Li L8 Air in April. Furthermore, Li L9 is in the pipeline. The company has also been aggressively expanding its retail network. Currently, the company has 299 retail stores in 123 cities.

It’s worth noting that Li Auto has a robust vehicle margin. With operating leverage, it’s likely that the margin will expand and cash flows will swell. With all these positives, LI stock seems poised for a big rally.

MakeMyTrip (MMYT)

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MakeMyTrip (NASDAQ:MMYT) stock looks attractive for investors considering exposure to the Indian markets. The travel and tourism company has significant growth tailwinds after the pandemic, and MMYT stock looks massively undervalued.

Regarding industry tailwinds, India will likely add 142 million middle-income households by 2030. Overall, there will be 300 million middle-income households by the decade’s end. As the standard of living improves, travel and tourism will get a boost.

Specific to MakeMyTrip, the company is already among the largest online player in the tourism and air ticketing segment. The company has guided organic and inorganic growth opportunities.

It’s worth noting that the company reported operating level losses between the financial year 2018 and 2021. However, the company reported a turnaround last year, and margin have continued to accelerate in FY2023. As profitability improves, MMYT stock is likely to trend higher.

Kinross Gold (KGC)

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Kinross Gold (NYSE:KGC) is a gold miner headquartered in Canada. I am tempted to talk about KGC stock as I see favorable tailwinds for precious metals. Gold will likely perform well, be it turbulence in the financial system, inflation, or a potential recession.

KGC stock has marginally increased by 12% in the first three months of 2023. At a forward price-earnings ratio of 18.6 times, the stock looks undervalued. KGC stock also offers a dividend yield of 2.5%.

It’s worth noting that Kinross reported $157.5 million in free cash flow for Q4 2022. With gold trending higher, FCF for the year will likely be in excess of $700 million. The company has also guided stable gold production through 2025.

With healthy cash flows, Kinross is a quality dividend growth stock. The company ended 2022 with a total liquidity buffer of $1.8 billion. This gives Kinross ample flexibility for organic and acquisition-driven growth. I will not be surprised if KGC stock trades above $10 within the next 12 months.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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