Foreign Value
By DAVID STIRES

(FORTUNE Magazine) – The universe of attractive stocks extends well beyond America's borders. To find the best bargains, we scrutinized all international companies with market values greater than $1 billion that have ADRs listed on the New York Stock Exchange. First we screened for stocks with P/E ratios below their five-year averages. We wanted companies whose sales and earnings had grown over the past year and are expected to continue growing over the next several years. To zero in on those firms whose prospects are improving the most, we looked for positive and expanding operating margins over the past 12 months. Finally, we searched for stocks trading at or below book value with positive free cash flow. --D.S.

Our Picks

 

June 24, 2005. Based on the previous 12-months' reported earnings. Wall Street estimates for the next three to five years. Not applicable.

FORTUNE TABLE / SOURCES: ZACKS INVESTMENT RESEARCH; VALUE LINE