Three undervalued Asian stocks that can ride out the trade war

published 5 August 2019

Each week, a professional investor tells us where he'd put his money. This week: Ian Hargreaves of Invesco Asia Trust selects three undervalued stocks in his region.

With the seesawing of trade negotiations over the past year, Asia has been hitting headlines for the wrong reasons. However, beyond the trade spats, the region remains the biggest driver of global growth with impressive economic and corporate fundamentals. Look closely and you will also see there is a solid trend of greater capital discipline being displayed by companies across the region, with stronger balance sheets and improving cash positions. These changes are often underappreciated by investors.

We look for opportunities in unloved areas of the market. We are overweight in financials, given what we consider to be improved fundamentals at selected banks and insurers, and look to take advantage of valuation weakness where we can find it. We also have a focus on companies with strong competitive advantages and undervalued earnings-growth prospects. A number of our holdings in the IT sector match this description and we have some significant positions in dominant Taiwanese and South Korean companies.