Foreign Exposure - ADR Outlook

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For investor’s concerned with the potential for inflation here at home, companies that derive a significant portion of revenues from outside the U.S. may be of interest. Based on The Applied Finance Group’s valuation model, we found 10 attractive ADRs, as well as 10 unnatractive ADRs, with a market cap greater than $1 billion that derived more than 50% of sales from outside the U.S. in the most recent fiscal year. An ADR (American Depositary Receipt) is a stock that trades in the U.S. but represents a specified number of shares in a foreign corporation. ADRs are bought and sold on American markets just like regular stocks, and are issued/sponsored in the U.S. by a bank or brokerage, making it easier for Americans to invest in foreign companies.

 10 Attractive and 10 Unattractive ADR's

A brief description of some of AFG's insights:

AFG's Valuation Metric – Measures the percent to target (deviation between a stock’s current trading price and its AFG current default target price). To derive the intrinsic value of a firm, AFG uses its proprietary Valuation Model (modified discounted cash flow model).

Economic Margin - A corporate performance measurement that addresses the gaps in GAAP, eliminating distortions caused by accounting policies to measure what a company is truly earning above or below their cost of capital.

Management Quality– Assesses management’s ability to make wealth creating decisions.
AFG's Value Universe - Companies in the AFG universe, which have MV/IC at the bottom 50% of the universe and have EPS estimates.