3 Wireless Non-US Stocks Likely to Tide Over Industry Headwinds

Industry Overview - The Zacks Wireless Non-US industry is facing high capital expenditures for infrastructure upgrades, margin erosion, supply-chain disruptions, and volatility in raw material prices due to geopolitical conflicts and high customer inventory levels. However, there is healthy demand driven by the increasing need for connectivity in the digital age, which is expected to benefit the industry in the long run [1][4]. Key Trends - There is a waning demand for legacy services, leading to increased infrastructure spending that compromises short-term margins. Companies are diversifying from legacy telecom services to business and enterprise opportunities, investing significantly in network upgrades and new technologies [4][5]. - Network convergence is driving traditional carriers and cloud service providers to invest heavily in advanced networking architecture to meet the growing demand for coverage, speed, and quality in mobile broadband and home Internet solutions [5][6]. Market Performance - The Zacks Wireless Non-US industry has underperformed compared to the broader Zacks Computer and Technology sector and the S&P 500, with a loss of 9.9% over the past year, while the S&P 500 and sector rose by 17.1% and 15.1%, respectively [9]. Valuation Metrics - The industry currently has a trailing 12-month Price/Book (P/B) ratio of 0.81X, significantly lower than the S&P 500's 7.82X and the sector's 10.03X. Over the past five years, the industry has traded between a high of 3.66X and a low of 0.32X, with a median of 0.8X [11]. Company Highlights - KT Corporation: The largest integrated telecom and digital platform service provider in South Korea, focusing on high-speed wireless networks and digital transformation services. The stock has gained 19.2% in the past year and has a long-term earnings growth expectation of 17.6% [14]. - Turkcell: A leading digital services provider in Turkey, with over $27 billion invested in transforming Turkey into a global data hub. The company has a VGM Score of A and is focused on sustainable growth [16]. - PLDT: The leading telecommunications provider in the Philippines, with a strategic partnership to develop online and mobile payment solutions. The company has a long-term earnings growth expectation of 7.5% [18].