Following Thursday and Friday's precipitous selloff in the equity market - and the last month's for that matter - I once again found inspiration to look elsewhere for investment opportunities. Where? Overseas.

The lowering of the U.S. equity market's tide has taken domestic stocks out to sea, yet many foreign stocks haven't felt the same pressure. Some of them have actually thrived despite widespread weakness. It's not an exhaustive list, but in this article we'll look at three American Depositary Receipts (ADRs) that just got a whole lot more attractive this week. (To find out more on how ADRs are used, see What Are Depositary Receipts?)

Novo Nordisk
This Denmark-based pharmaceutical company offers something many of its American counterparts can't - constituency. Novo Nordisk (NYSE:NVO) has grown the top and bottom lines for three consecutive years. A surprising number of other biotech outfits haven't been able to match this performance, and that may be why the stock is up 21.4% for the last twelve months while the average biotech stock is ahead by about 7.3% for the last year.

Novo put itself back on the radar again this week when the company announced a licensee deal with Emisphere (Nasdaq:EMIS) to use Emisphere's technology to make an once-per week, oral diabetes treatment. There's actually some decent competition in this diabetes treatment space; Eli Lilly (NYSE:LLY) and Alkermes (Nasdaq:ALKS) are also working on a once-per-week oral dose. Novo's drug Liraglutide is expected to hit he market first though. There is a daily treatment on the market already called Byetta; it is produced by Amylin and Eli Lilly jointly. Byetta generated more than $630 million in sales for 2007. So, Novo's opportunity is sizable.

Sims Group
Australian metal company Sims Group (NYSE:SMS) has spent the last few weeks getting focused on its core business - recycling. Sims sold off its steel distribution division, and acquired Pacific Coast Recycling, LLC. I like the focus, and is seems to work well.

A merger with Metal Management last year has led to record sales and profits this year, but a "then-versus-now" comparison of the raw numbers may not be totally meaningful. However, the company has proved to be profitable with the two enterprises melded into one. For the last nine reported months, Sims posted $357 million in EBITDA, and a net profit after tax of $182.5 million.

The company has acknowledged that many of the charges for the merger have not yet been booked, and will show up in Q4's numbers. However, the forecast growth still makes Sims a compelling longer-term idea. Analysts are looking for $132 million in earnings for Q4 (not counting any one-time, extraordinary acquisition expenses), which translates into profits if $314 million for the year. Both the top and bottom lines are on pace for pro-forma double-digit growth. (For more on analysts earnings expectations' and what it can mean for a stock's price, check out Can Earnings Guidance Accurately Predict The Future?)

51Job Inc.
Chinese job search and human resources company 51Job Inc. (Nasdaq:JOBS) may not be able to brag about phenomenal fundamentals, but they're solid - and getting better. 51Job filed its annual (2007) results with the SEC on June 27, and for the second straight year we've seen sales and earnings move higher.

The story here is emerging growth. For all of 2007, 51Job earned 50 cents per American depositary share American depositary share (ADS), which represents two common shares, leading to a price-to-earning ratio of 35.8. During the first quarter of 2008, the company earned 11 cents per ADS. Annualizing that total (multiplying it by four) puts the price multiple somewhere around 42.

With the need for employment services growing in densely populated China, 51Job is set for continued growth.

Bottom Line

It's worth noting that many ADRs were still guilty of poor performance over the last month, just like U.S. stocks. The epidemic doesn't seem to be quite as widespread overseas though. And in this environment, we need all the help we can get.

Discover how ADRs can help you gain international exposure in Investing Beyond Your Borders.

Related Articles
  1. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  2. Stock Analysis

    3 Stocks that Are Top Bets for Retirement

    These three stocks are resilient, fundamentally sound and also pay generous dividends.
  3. Investing News

    Are Stocks Cheap Now? Nope. And Here's Why

    Are stocks cheap right now? Be wary of those who are telling you what you want to hear. Here's why.
  4. Investing News

    4 Value Stocks Worth Your Immediate Attention

    Here are four stocks that offer good value and will likely outperform the majority of stocks throughout the broader market over the next several years.
  5. Investing News

    These 3 High-Quality Stocks Are Dividend Royalty

    Here are three resilient, dividend-paying companies that may mitigate some worry in an uncertain investing environment.
  6. Stock Analysis

    An Auto Stock Alternative to Ford and GM

    If you're not sure where Ford and General Motors are going, you might want to look at this auto investment option instead.
  7. Mutual Funds & ETFs

    The 4 Best Buy-and-Hold ETFs

    Explore detailed analyses of the top buy-and-hold exchange traded funds, and learn about their characteristics, statistics and suitability.
  8. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  9. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  10. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!