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It’s no secret that U.S. investors tend to gravitate toward domestic stocks. Despite the country’s challenges, many of the world’s innovation leaders are still in the United States. Also, S&P500 If we return to bull market territory, shareholders may feel little incentive to change this approach.
However, such an attitude could cause investors to miss out on great opportunities overseas. Moreover, some international stocks have not benefited significantly from the new bull market. To this end, investors may need to take a closer look at two of his points in particular. sea limited (S.E. 0.43%) and stone co (STNE 1.12%).
1. Sea Limited
Singapore-based Sea Limited is often ignored at the expense of its competitors. Even though the company’s e-commerce arm, Shopee, serves more than 600 million consumers in the region, China’s 1.4 billion market often gets more attention. moreover, Amazon or mercadolibre It is often overshadowed by Southeast Asia’s e-commerce, fintech and gaming giants.
Sea Limited thrived in the 2021 bull market. Still, the slowdown in e-commerce and gaming has left Sea Limited in rough waters. As a result, entertainment stocks have fallen 90% from this high.
Nevertheless, the company’s two divisions grew, with Shopee increasing its revenue by 24% annually in the first nine months of 2023. During the same period, its fintech arm, Sea Money, experienced a 50% revenue increase.
Unfortunately, investors punished the Garena gaming division for lagging behind. His revenue for the first three quarters of 2023 was down 43% compared to the same period in 2022.
Still, Garena is a battle royale game, so it could use some improvement. free fire, It was previously banned in India, but has gained approval from the country’s 1.4 billion people. News like this can spark optimism in the stock, especially if other games have the potential to achieve similar success. free fireIt was the most downloaded mobile game in the world from 2019 to 2021.
Success in the game could significantly improve Sea’s financial situation. As of now, his $9.4 billion revenue has increased by 5% annually for the first nine months of 2023. Despite returning to a quarterly loss in the third quarter, the company still reported net income of $260 million for the first three quarters of 2023, significantly higher than the $2.1 billion loss in the same period last year.
Investors may have been unaware of the good news for Sea, as its stock price is hovering near multi-year lows. However, the recent P/E ratio of 32 times is also close to the lowest point in history. If Garena’s growth begins to match that of his other two divisions, Sea Limited could finally make up for some of the ground it has lost over the past three years.
2. Stone Co
StoneCo is an unfamiliar name to most U.S. investors because it only operates in Brazil. The company rose to prominence by becoming the Brazilian version of the company. blockThe Square ecosystem provides fintech infrastructure to businesses of all sizes and also provides enterprise software services to these businesses.
StoneCo has also received pre-IPO interest from Warren Buffett berkshire hathaway, after its founding in 2018, the company attracted interest from many other investors. By early 2021, StoneCo had climbed to a high of $95 per share, a significant increase from its initial IPO price of $24 per share.
Unfortunately, the pandemic temporarily derailed this growth story, with fintech stocks plummeting due to a slowdown in corporate activity, high inflation, and a large number of non-performing loans. From high to low, StoneCo fell by his 93%. But as financial conditions improved, it rose 85% last year.
In the first nine months of 2023, revenue was R$8.8 billion ($1.8 billion), an increase of 28% compared to the same period in 2022. Total revenue increased 32%, with the software division increasing 8%.
Additionally, StoneCo returned to profitability as cost and expense growth was contained. Net profit for the first three quarters of 2023 was 944 million reais ($190 million), up from a loss of 605 million reais in the first nine months of 2022.
The recent rise in the stock price has increased the P/E ratio to approximately 28 times. Given the rapid growth of the business, this valuation could bode well for investors, as StoneCo’s long-awaited recovery from the bear market may still be in its infancy.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Will Healy holds positions at Berkshire Hathaway, Block, MercadoLibre, and Sea Limited. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Block, MercadoLibre, Sea Limited, and StoneCo. The Motley Fool has a disclosure policy.
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