James Dennin, Kapitall: We decided to look for foreign stocks under 10 dollars that also have low price to equity and price to book ratios. There are a couple of reasons to think that foreign markets might do better than American markets this year. For one, there was the record breaking run of the S&P 500 in 2013, which leaves most investors skeptical that US stocks will repeat the performance. [Read more from Kapitall: Mergers and Acquisitions: Do Stocks Miss Out if They Miss Davos?] So far this year, improving economic conditions and spending have failed to boost the stock market. The explanation, depending on who you ask, is that most investors are too wary to add a position before earnings come out this month. Yet most stocks have performed pretty well in 2014 so far: about 70% of the companies who have released their numbers beat estimates. Usually a positive earnings surprise boosts the price of a stock, sometimes considerably. However the S&P is still down for the year, although only by a smidgeon, and 2014 is only about three weeks old. Investing ideas Given the stock market's lukewarm performance so far this year, investors might want to consider diversifying their portfolios across foreign equities, in case some of those markets fare better. The UK, Germany, and Japan have all released positive outlooks going into 2014, and Japan is one of the few countries in the world that was able to keep pace with the US market last year. So we built a list of foreign stocks that trade on US exchanges that seem greatly undervalued using three of the most popular valuation metrics: price to equity (P/E) below 15, forward price to equity (forward P/E) below 15, and price to book (P/B) below 1. All of these screens look at the ratio between the market price, and approximations of the price of equity held by shareholders. When this ratio is low, it either indicates that the company is losing value, or is being sold at a bargain because growth investors got it wrong.