James Dennin, Kapitall: We decided to look for undervalued emerging market stocks in countries like China and Brazil. The markets rose at the end of last week, and they're still looking strong today, including some of the exchanges in emerging market economies. While it's been widely reported that some emerging powerhouses like China are slowing down, growth in those markets is still on track to fuel the global economy into 2030. (Read more on China from Kapitall: Chinese Hydropower: Investing Idea or Just Another Industrial Complex?) With that in mind, we decided to look for some emerging market stocks that might be undervalued, in order to find value potential among the volatility in global markets. To build our list, we constructed a universe of emerging market stocks with a low price-to-book ratio (P/B) below one. This means that the stock is trading at a relatively low price relative to what the company is worth. To get a better idea of how the company is actually doing, we then limited the search to companies with encouraging inventory trends. Inventory can represent two things: the company’s expectation of what they will soon sell, and also what the company has not yet sold. Therefore, a growing inventory by itself can mean a more positive sales outlook, or indicate negative trends such as the inability to sell products. But when compared with revenue growth, changes in inventory paint a clearer picture. If inventory grows faster than revenue, it suggests the company is having trouble selling its inventory. If inventory grows slower, it may indicate that the company is selling even more than they anticipated. We were left with five stocks, four in China and one in Brazil, that demonstrate positive inventory trends. Click on the interactive chart to view annual returns over time. Do you see investing opportunities in these emerging market stocks? Use the list below to start your analysis.