Mar. 25, 2009 (Investor's Business Daily) -- As IBD founder and Chairman William O'Neil says, all stocks are bad -- unless they're going up. It's not enough to log big profit growth. A scan of ADRs from emerging markets outside China shows lots of issues with high profit growth, but poor stock performance.
Russia has three issues that have high EPS Ratings, but low Relative Strength Ratings. Integrated oil company Lukoil (LUKOY) (EPS Rating: 96, RS Rating: 46) crashed 81% from mid-May to late October.
Steel maker Mechel (MTL) (EPS Rating: 95, RS Rating: 18) dived 94% through late January. TV network operator CTC Media (CTCM) (EPS Rating: 96, RS Rating: 46) lost 93% from Feb. 27, 2008 to Feb. 20, 2009.
These three stocks have almost doubled from their low. But it's hard to imagine any of them building a base anytime soon.
India has two high-earning ADRs, both outsourcers. WNS Holdings (WNS) (EPS Rating: 96, RS Rating: 17) dropped 84% in the past 11 months.
Infosys Technologies' (INFY) (EPS Rating: 91, RS Rating: 64) decline, 58%, is more reasonable. There, one can imagine a base taking shape at some point. But, in a broader sense, one hopes India can broaden its industrial base beyond outsourcing.
Brazil may offer a glimmer of hope. Eletrobras (EBR) (EPS Rating: 91, RS Rating: 64) clearly is forming a base. But this stock has a rocky earnings outlook: It probably earned $2.67 a share in 2008, up 251% from '07. Outlook for this year is 87 cents a share, a decline of 67%.
Integrated oil company Petrobras (PBR) (EPS Rating: 93, RS Rating: 88) is climbing the right side. But, after an 81% drop, what sort of base can it build in the near term?
Miner CVRD (RIO) (EPS Rating: 99, RS Rating: 64) has barely begun to start a right side. And EPS estimates for 2009 are for a 48% decline.
