The financial media gives plenty of attention to China and Japan, but one Asian country that just doesn’t seem to receive its due is South Korea. Some of the most-attractive investment opportunities in the world can be found in South Korea. In fact, the average South Korea stock is about 40% cheaper than U.S. stocks on a price-to-earnings basis, trading at an average of 9.6 times trailing earnings compared to 17 times for U.S. stocks.
So says Tony Sagami (www.uncommonwisdomdaily.com) in edited excerpts from his original article* entitled Profit ‘Gangnam Style’ From This Overlooked Asian Superstar.
[The following article is presented by Lorimer Wilson, editor of www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Sagami goes on to say in further edited excerpts:
South Korea was one of the world’s fastest-growing economies in the world from the 1960s to the late 1990s, and is still one of the fastest-growing developed countries in the world. With a population of 50 million, South Korea has grown into a high-tech industrialized economy — the 15th largest in the world, and the fourth-largest in Asia.
GDP per Capita Growth is #1
Its major distinction, however, is that it is ranked No. 1 for GDP per-capita growth of all major economies, beating out countries like the U.S. and Germany.
Global Economic Growth Rankings 1980-2011
South Korea’s GDP growth rate recently hit a two-year high and is expected to expand by 2.3% for full-year 2013. At first glance, that isn’t a huge number but this nation is at a favorable starting point for additional growth, especially when compared to many of its bigger brethren around the world.
Unlike much of Europe and the U.S., South Korea has not accumulated a mountain of growth-choking debt. Public spending only accounts for about 30% of GDP, and South Korea actually boasts a current account surplus…Even Korean corporations are in solid financial shape, with an average debt-to-equity ratio below 50%.
Reduced Interest Rates
Also, the Bank of Korea recently cut its benchmark interest rate from 2.75% to 2.5%, the first cut in seven months, to keep its economy humming. The move is aimed at boosting the export sector — which accounts for nearly half of its economy — and countering the Bank of Japan’s aggressive monetary policy…
Stock Market (KOSPI) Performing Well
Here’s a look at how the Korea Composite Stock Price Index (KOSPI) has performed over the past few years. As you can see, it’s added nearly 1,000 points since January 2009, and trading volumes are in the hundreds of millions of shares.
…There is no shortage of options if you would like to include Korea in your portfolio.
9 Korean Stocks Traded on U.S. Exchanges
There are 9 Korean stocks traded… in the U.S. that you can consider:
- Gravity Co. (GRVY) develops and publishes online games in Japan, Taiwan, Brazil, the Philippines, Singapore, Malaysia and Thailand.
- KB Financial Group (KB) manages commercial banking, brokerage, insurance, real estate and asset-management businesses.
- Korea Electric Power (KEP) generates, transmits and distributes electricity and nuclear and thermal power.
- KT Corp. (KT) delivers wireless and wired broadband services for phone, Internet and pay-TV subscribers.
- LG Display (LPL) makes liquid crystal display (LCD) panels for TVs, monitors, laptops, phones, navigation devices and other personal and industrial uses.
- POSCO (PKX) manufactures and trades steel products, along with constructing buildings and operating power plants.
- Samsung Electronics (SSNLF) is a well-known electronics player in the TV, video, mobile, computing, personal photography and home appliance spaces.
- Shinhan Financial Group (SHG) provides consumer and corporate financial services including loans, deposits, installment financing, investment consulting, securities trading and brokerage services.
- SK Telecom (SKM) is in the wireless phone, data, Internet and related equipment business.
4 South Korea-focused ETFs Are Available
If you’re more of an ETF investor, there are 3 South Korea-focused ETFs to choose from:
- iShares MSCI South Korea ETF (EWY)
- First Trust South Korea ETF (FKO)
- Direxion Daily South Korea Bull 3X Shares ETF (KORU)
- Direxion Daily South Korea Bear 3X Shares ETF (KORZ)
I’m not suggesting that you rush out and buy any of the above stocks or ETFs tomorrow morning. (As always, timing is everything, so I recommend that you wait for my buy signal in my Blue-Chip Option Alert service.)
South Korea is a dynamic, growing economy that is very worth your attention and perhaps even some of your investment dollars.
(Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.)
*http://www.uncommonwisdomdaily.com/profit-gangnam-style-from-these-south-korea-asian-superstars-16389?FIELD9=1 (©2013 Uncommon Wisdom Daily. All Rights Reserved.)
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