As market volatility and fear persist, there are few stocks displaying strength. These concerns are certainly justified as sky-high inflation remains entrenched, while growth has started to slow — a toxic concoction for equities. But are there some global stocks now showing promise that investors can put on their watchlists?
In IBD's Global Leaders Screen, there are a few notable names. While these stocks have not been generating large returns, they are still holding up well amid market weakness.
Chinese gaming stock NetEase has shown resounding strength despite both a sell-off in technology stocks and Chinese companies. Shares are currently trading with a relative strength line near highs as the stock forms a deep base with a 118.29 buy point. This makes NetEase one of the top global stocks to watch.
NetEase is the current leader in IBD's gaming software industry group. While no growth is projected this year — EPS is estimated to decline slightly to $4.59 from $4.62 — analysts expect earnings to increase to $5.32 in 2023.
Recent outperformance has been in large part thanks to a softening tone out of Beijing that heavy-handed regulations — which decimated Chinese technology stocks — may be easing. While there is some positive sentiment over regulations, so far approvals have not directly affected games produced by NetEase.
Global Stocks: Equinor Outperforms On Gas Demand
Energy stocks have continued to lead the market, and Equinor has been no exception. The Norway-based company is involved in the exploration, production and refining of oil and natural gas.
Equinor is also uniquely positioned as the second-largest supplier of pipelined natural gas to Europe, which has gained multitudes of importance as Europe shuns Russian energy.
Equinor is looking to make long-term commitments to increase production to address this supply imbalance. On Thursday, the company reached a 15-year agreement with Cheniere Energy to purchase 1.75 million tons of liquefied natural gas per year, starting in 2026.
Higher energy prices have driven soaring growth, with Equinor's EPS increasing to $3.09 last year from just 28 cents in 2020. Earnings growth is expected to continue. Analysts project EPS of $5.74 for this year.
Equinor stock is forming a cup-with-handle base with a 38.80 buy point, according to MarketSmith pattern recognition. This global stock gapped down Monday, but the pattern is still alive.
