3 Emerging Market Stocks to Buy Before They Take Off

Core Viewpoint - Emerging market stocks present opportunities for investment due to projected growth rates exceeding 4% compared to 2% for developed economies, alongside attractive valuations [1] Group 1: Alibaba (BABA) - Alibaba reported a 7% year-over-year increase in revenue for Q4 fiscal 2024, but adjusted diluted EPS declined by 5% due to higher operational expenses [2] - The company is focusing on technological advancements, particularly in generative AI, and has partnered with LVMH to enhance luxury shopping experiences [3] - BABA stock has a year-to-date gain of 1%, offers a 1.3% dividend yield, and trades at 9.5 times forward earnings with a 12-month median price target of $106, indicating a 35% upside potential [3] Group 2: Infosys (INFY) - Infosys reported flat quarterly revenue growth at $4.6 billion for Q4 and a 28.8% year-over-year increase in earnings per diluted share [5] - The company projects cautious revenue growth of 1-3% for fiscal year 2025 and is enhancing its offerings through strategic partnerships [6] - INFY stock has declined nearly 3% year-to-date, offers a 2.5% dividend yield, and trades at 23.2 times forward earnings with a 12-month median price forecast of $19.3, signaling over an 8% upside [6] Group 3: iShares MSCI Emerging Markets ex China ETF (EMXC) - EMXC provides access to large and mid-cap emerging market stocks, excluding China, and has net assets of $13.5 billion [7] - The ETF holds 704 stocks, with the top ten accounting for nearly 25% of its assets, and has a diverse sector allocation, primarily in Information Technology (30%) and Financials (24%) [7] - EMXC has gained almost 5% year-to-date, trades at 16 times trailing earnings, has a low expense ratio of 0.25%, and offers a 2% dividend yield [8]