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2 Southeast Asian Stocks You Can Actually Buy Now

Southeast Asia is perhaps the biggest growth region of the 21st century. And most Southeast Asian stocks have only begun to grow. Here are 2.

Need a break from all the turmoil, inflation stress and interest rate-hike speculation dominating U.S. markets right now? Let me float a couple Southeast Asian stock ideas by you - with far greater growth potential than most U.S. stocks. But first, a history lesson...

In the 19th century, there was a common expression used to describe the early intrepid explorers of the American West. They were said to be “seeing the elephant” – that is, they were seeing “all that could be seen.”

On Wall Street even today, brokers looking for ten-bagger stocks and portfolio managers seeking big gains are said to be “hunting for elephants.”

Now, one of the best chances of finding these elephants lies in emerging markets. For here is growth many times that of America and Europe fueled by a young, vibrant consumer class, coupled with the world’s most fascinating cultures, nature, and landmarks.

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I have been fortunate to gain on-the-ground experience in many of these markets, particularly in Asia. This has allowed me the opportunity to meet some tycoons – sometimes referred to as Taipans, a term which roughly translates as “tycoon.”

If you met and spent some time with them, I think a light bulb would eventually go off in your head. You are better educated and grew up in much better circumstances compared to most new tycoons.

Invest Like a Taipan

So just what is their edge? Why do they see opportunities that elude we mass mortals? In short, they think big and are very attentive to what is happening on the ground. They have great personal and professional networks that feed them valuable intelligence. Add a pinch of imagination and a shot of courage, and you have a potential tycoon.

If you wish to become a Taipan, I suggest you look beyond China and India in the coming year to a story that is being completely missed by even the most sophisticated investors – the 10 nations of Southeast Asian.

These countries share more than geography. They have a young, tech-savvy population with a rising middle class and booming consumer markets. For example, Indonesian consumer spending has more than doubled in the last decade as it approaches becoming a $1 trillion economy.

Singapore is already the world’s richest nation on a per capita basis. Vietnam has the fastest growing economy in the world and is projected to do even better this year.

In short, tycoons think differently and follow a simple investment blueprint that I will describe to you in a few minutes. I can assure you right now that the new billionaire tycoons do grasp that global power and profits are making a dramatic pivot to the Pacific Rim.

Just as the 20th century was centered on the Atlantic, the 21st century belongs to the nations bordering the Pacific Ocean.

Now, quite frankly, following the new tycoons is not for everyone.

Yes, there is a bit more risk investing in the leading food company of Singapore, Chile, Panama, Indonesia, Korea, Mexico, or Taiwan than investing in Kraft Heinz (KHC), but the potential rewards is far, far greater.

In short, just imagine the opportunity right now to invest in the Johnson & Johnson (JNJ) stock of a century ago. This is how the new tycoons are building their fortunes at lightning speed while most investors keep falling behind.

You too can profit greatly by investing in the JPMorgan of Singapore, the Heinz of Malaysia, the Kraft of Thailand, the Google of Russia, the Starbucks of Taiwan, the Chevron of Indonesia and the JetBlue of Panama.

This is your opportunity – now go out and seize it. Here are two ideas I would buy now to get you started.

2 Southeast Asian Stocks to Buy Now

DBS Bank (DBSDY) is a high quality play on growth in Southeast Asia, as the largest and strongest bank in Southeast Asia and the leading consumer bank in both Hong Kong and Singapore. Its tentacles reach out through 200 branches in 50 cities. DBS produces steady profit margins, revenue, and earnings and is also increasing market share in consumer and corporate banking. Despite all of these strengths, DBS is trading at only 12 times trailing earnings and sports a solid 4.6% dividend yield. This is a high-quality, conservative idea for all investors.

Sea Limited (SE) shares are up 20% from their early-May lows at 57. Sea is an internet company with a gaming business along with an e-commerce and digital payments business

Sea’s e-commerce business, Shopee, is looking better as its losses are declining while revenue growth remains strong. Sea also has a massive growth opportunity targeting Southeast Asia. Meanwhile, revenue from SeaMoney, Sea’s digital financial services unit, more than quadrupled to $236 million.

Fortunately, Sea raised $6 billion in equity and convertible debt a little over a year ago, when the stock was in the 300s. With more than $8 billion in cash now on its balance sheet, it appears Sea can easily make it through the next few years without cutting back on investing in growth. This is a buy for aggressive investors.

After the pandemic recedes, I encourage you to get out to see these Southeast Asian emerging markets. You will see the growth opportunities and may meet a real Taipan.

Do you own any Southeast Asian stocks in your portfolio aside from the two listed above? Tell us about them in the comments below!

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Carl Delfeld is a member of the Cabot investment team, and chief analyst of Cabot Explorer.