10 Oversold Global Stocks To Buy
In this piece, we will take a look at ten oversold global stocks to buy. If you want to skip our analysis of the global economic climate, then take a look at 5 Oversold Global Stocks To Buy.
Like July, August is full of surprises on the data front. After the U.S. economy grew quite strongly in the second quarter, investors started to worry whether the Federal Reserve might have more leeway in its ability to raise interest rates. This was naturally bullish for the dollar, and the greenback rose against its major currency counterparts and markets stood muted. However, another crucial set of data came through in August which shows that another one of the Federal Reserve's keenly watched indicators for interest rate decisions, namely the labor market, was weaker than expected.
The labor market data is released by the Labor Department and the figures for July show that the economy added 187,000 jobs in the month to mark a slight 2,000 increase over June's figures. The data also undershot expectations for 200,000 jobs, which is broadly believed as a crucial level below which the market starts to slow down. Naturally, on the surface, this provides the Federal Reserve with little room to justify additional interest rate hikes, but while currency markets reflected the true impact of the data release, stock markets showed little gains with the S&P 500 up by 0.29% and the NASDAQ up by 0.51%.
Immediately after the job market data, the president of the Atlanta Fed Raphael Bostic affirmed the belief that the job market appears to be slowing down in an orderly manner and we might not need any more interest rate hikes in the future. He dismissed concerns about higher wage growth that have created worries of contributing to higher inflation, pointing out that it will take a while for wage growth to track with inflation which has touched painfully high levels recently. Speaking to Bloomberg Television, the Atlanta Fed President shared:
We are today in a restrictive stance, and as inflation continues to fall, the degree to which it’s restrictive actually grows as that gap between the inflation rate and our interest rate widens. So I think that will put enough constraint on the economy that it will continue to slow. But again, I’m not expecting this to be a two-month or a three-month period.
So, while America might just avoid a recession this year, the global economic outlook is far more uncertain. China, which has been one of the fastest growing countries in the world, is struggling to deal with the aftereffects of a strict policy to fight the coronavirus. Additionally, the European Union is battling with a shakeup in the energy industry that has forced it to diversify away from Russian gas in the aftermath of the latter's Ukraine invasion. These have dampened global sentiment and created value for safe haven assets such as the U.S. dollar and gold.
Turning to the International Monetary Fund (IMF) to gauge what might happen in the global economy during 2023's second half, the fund believes that global economic growth will slow down in 2023 over the previous year's readings. This is unsurprising, as the effects of high interest rates on GDP growth rates have been expected to be negative, and according to the IMF, 2023's global GDP growth will sit at 3% and stay there in 2024. This slowdown will be particularly strong in China, whose GDP is expected by the IMF to grow by 5.2% in 2023, a marked drop from the 8.4% growth rate in 2021. Along with China, Brazilian growth is also expected to slow down. While not as fast as China, Brazil's economy grew by 5% in 2021 but the IMF believes that it fall to a sharp low of 1.2% in 2024. These worries are also on the Brazilian central bank's mind, which cut the rates lower than was initially expected by markets. This was the first interest rate cut in years, and the fifty basis points of rate reduction was twice what the majority of analysts polled by Reuters and Bloomberg had expected.
China's economy grew by 6.3% in Q2 2023, which was well below estimates and the slowdown was quite marked on a quarterly basis where growth dropped by more than half. China's economy had grown by 2.2% in Q1 2023 over Q4 2022, but the sequential reading for the second quarter saw growth limited to 0.8%. However, there is a longer term trend in China's quarterly growth rates as well. For instance, consider the OECD's China GDP by expenditure data set to realize that Q1 has always seen historical drops but has slightly grown annually as well. This trend has persisted through the coronavirus economic shock, and China was also better insulated against the commodities fallout after the Russian invasion of Ukraine.
Moving towards the corporate side, the growth in globalization and the inter linkage in supply chains have made a couple of global firms crucial to the state of the world's economy. Just because many of the major global firms are not listed on U.S. exchanges doesn't mean they cannot affect the global GDP. In fact, the Saudi state owned oil giant Saudi Arabian Oil Company (TADAWUL:2222.SR) often sets the tone for economic growth due to the Saudi government and OPEC's ability to manipulate crude oil prices based on production levels. In fact, the Saudi government owns roughly 90% of Aramco's shares and earns billions of dollars in the form of dividends from the world's largest oil company.
Today, we'll look at some global stocks that are oversold and traded on U.S. exchanges. If you're interested in learning more about how sifting for stocks based on overbought and oversold levels is part of a broader strategy part of technical and momentum trading, then you can check out 10 Oversold Bank Stocks To Buy. Some of the most oversold firms on this list are Fusion Pharmaceuticals Inc. (NASDAQ:FUSN), Neonode Inc. (NASDAQ:NEON), and Galmed Pharmaceuticals Ltd. (NASDAQ:GLMD).
Photo by Adam Nowakowski on Unsplash
Our Methodology
To compile our list of the most oversold global stocks, we chose global stocks trading on US exchanges with RSI scores lower than 30 and average analyst rating scores of Buy or higher. Given the current high interest rate global economic climate, most of these firms are in sectors belonging to biotechnology, information technology, and other related areas.
Oversold Global Stocks To Buy
10. Aptorum Group Limited (NASDAQ:APM)
Latest 14 Day RSI Score: 22.56
Aptorum Group Limited (NASDAQ:APM) is a British company that develops treatments for virus and bacteria caused infections and ailments as well as options for treating cancer and obesity. You'd be as surprised as we are to find out that while Aptorum Group Limited (NASDAQ:APM) is a penny stock, its average share price target is $80. However, the latest analyst coverage was in 2022, so the estimates might be out of date. On a positive note, the firm's three year annualized revenue growth rate is a strong 34.28%.
During Q1 2023, Ryan Tolkin (Cio)'s Schonfeld Strategic Advisors sold the 45,000 Aptorum Group Limited (NASDAQ:APM) shares that it had owned in Q4 2023 - being the last hedge fund investor to hold a stake in the company according to Insider Monkey's database of 943 hedge funds.
Along with Neonode Inc. (NASDAQ:NEON), Fusion Pharmaceuticals Inc. (NASDAQ:FUSN), and Galmed Pharmaceuticals Ltd. (NASDAQ:GLMD), Aptorum Group Limited (NASDAQ:APM) is an oversold global stock to buy.
8. Profound Medical Corp. (NASDAQ:PROF)
Latest 14 Day RSI Score: 22.07
Profound Medical Corp. (NASDAQ:PROF) is a Canadian medical devices company. The firm has beaten analyst EPS estimates in three of its four latest quarters, but Raymond James downgraded the stock to Strong Buy from Outperform in August 2023.
Insider Monkey's first quarter of 2023 survey covering 943 hedge funds revealed that four had owned the firm's shares. Profound Medical Corp. (NASDAQ:PROF)'s largest hedge fund investor is Jean-Francois Tardif's Timelo Investment Management with an investment of $7 million.
10. Theratechnologies Inc. (NASDAQ:THTX)
Latest 14 Day RSI Score: 23.23
Theratechnologies Inc. (NASDAQ:THTX) is a Canadian firm that develops treatments for cancer and the complications that might arise from an HIV infection. The firm has missed analyst EPS estimates in three of its four latest quarters and the latest analyst rating comes from Jones Trading which has rated the shares as a Buy.
By the end of March 2023, five of the 943 hedge funds part of Insider Monkey's database had invested in the firm. Theratechnologies Inc. (NASDAQ:THTX)'s largest shareholder is Guy Levy's Soleus Capital with an investment of $7.3 million.
7. GFL Environmental Inc. (NYSE:GFL)
Latest 14 Day RSI Score: 19.24
GFL Environmental Inc. (NYSE:GFL) is a waste management company that is headquartered in Canada and operates in the U.S. as well. Its second quarter results blew analyst EPS estimates out of the park and the shares are rated Strong Buy on average.
After sifting through 943 hedge fund portfolios for 2023's first quarter, Insider Monkey discovered that 21 had bought GFL Environmental Inc. (NYSE:GFL)'s shares. Robert Pohly's Samlyn Capital is the largest shareholder with an investment worth $96.8 million.
6. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Latest 14 Day RSI Score: 18.39
SolarEdge Technologies, Inc. (NASDAQ:SEDG) sells power management products for solar systems. The shares are down 36% year to date, a sell off that worsened after disappointing guidance during the firm's latest quarter.
During March 2023, 42 of the 943 hedge funds surveyed by Insider Monkey had invested in the firm. SolarEdge Technologies, Inc. (NASDAQ:SEDG)'s largest hedge fund shareholder is D. E. Shaw's D E Shaw with a stake that is worth $272 million.
Fusion Pharmaceuticals Inc. (NASDAQ:FUSN), SolarEdge Technologies, Inc. (NASDAQ:SEDG), Neonode Inc. (NASDAQ:NEON), and Galmed Pharmaceuticals Ltd. (NASDAQ:GLMD) are some oversold global stock with favorable analyst ratings.
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Disclosure: None. 10 Oversold Global Stocks To Buy is originally published on Insider Monkey.