This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

6 Best-Performing Emerging Market ADRs

NEW YORK ( TheStreet) -- A good way to enter emerging markets is through ADRs. An emerging market equity-fund manager at Pimco said the valuations for emerging market stocks are cheap. The firm is selectively accumulating positions in these markets.

Based on the MSCI Emerging Markets Index, stocks have been mixed with spots of buying opportunities. With Germany and France pledging support to the European banks, investor sentiment buoyed in emerging markets, taking the MSCI Emerging Markets Index to its biggest four-day gain in 16 months. From its 52-week low of 831.22 on Oct. 4, 2011, the index climbed 6.3% to close at 883.9 on Oct. 7, 2011. At close October 11, the index scaled up to 909.43.

A perfect buying opportunity came when the MSCI Emerging Markets Index slumped 31% with a P/E ratio of 9.4 on Oct. 5, 2011, reversing its 2011 high to hit its lowest level since Dec. 2008, according to data compiled by Bloomberg.

As of close on Oct. 12, 2011, the S&P 500 and Dow Jones gained 2.9% and 3.7%, respectively. Meanwhile, benchmark indices for emerging markets were mixed. India's Nifty added 2.8%, China's Shanghai Composite shed 1.3% and Brazil's Bovespa wiped out 3.3%.

A few emerging market American Depositary Shares generated lucrative returns for investors during the past month, while a few, as per analysts' estimates, have potential double-digit upsides over the next 12 months. We present six such stocks that gained 2% to 17% in the past month. These stocks have potential upside of 7% to 208%, according to the average estimates of analysts surveyed by Bloomberg.

The stocks are arranged in ascending order of one-month gains.






6. Dr. Reddy's Laboratories (RDY), an integrated pharmaceutical company, focuses on providing therapeutics through its three business units: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI) and Proprietary Products. The stock surged 1.8% during the last month.

Of the three analysts covering the stock, two recommend a buy and one rates it a hold. There are no sell ratings on the stock. Data from Bloomberg has analysts forecasting 33.1% upside to $41.80 in the upcoming 12 months.

In the past month, after the U.S. FDA approval, RDY launched Rivastigmine Tartrate capsules (1.5 mg, 3 mg, 4.5 mg and 6 mg), a bioequivalent generic version of Exelon capsules, in the U.S. market. The Exelon brand and its generic Rivastigmine Tartrate recorded sales of almost $92.6 million in the U.S. for the 12 months ended June 2011, as per data from IMS Health.

Industry analysts believe that export-oriented pharma companies will benefit from the INR weakening to its 28-month low. Companies like RDY earn more than 50% of their revenue from export sales and will benefit with the INR depreciating against major world currencies.

RDY recently declared its intention to expand its portfolio of over-the-counter drugs along with the acquisition of a pharmaceutical plant in Russia. The chief executive said in an interview to the Wall Street Journal that the company plans to increase the share of its OTC products to 40% to 45% from the current 28%.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,120.89 -51.79 -0.30%
S&P 500 1,989.57 -4.72 -0.24%
NASDAQ 4,526.5270 -1.1620 -0.03%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs