3 International Stocks Top Managers Like in 2025
#Morningstar #InternationalStocks #BestFundManagers
Put these must-own international stocks on your watch list.
00:00 Introduction
00:42 SAP SAP
01:17 Taiwan Semiconductor TSM
01:55 Sony SONY
Susan Dziubinski: I’m Susan Dziubinski with Morningstar. Today, we’re talking about three stocks that are the top holdings for some of the best international stock fund managers. Who are these top managers? They’re active managers running funds that land in one of Morningstar’s foreign large-cap categories. Their funds earn Morningstar Medalist Ratings of Bronze or higher, and their portfolios include 50 stocks or less. We think these managers are adept stock-pickers, and we often peer into their portfolios for new investment ideas.
Not all of these top international stocks look undervalued according to Morningstar today, but we’d suggest that investors interested in international stocks put these names on their watchlists.
The top holding for our best international stock fund managers is SAP. Based in Germany, SAP is the world’s largest provider of enterprise application software. Morningstar thinks SAP has carved out a wide economic moat thanks to high switching costs associated with its products. We forecast low- to midteens revenue growth in the near and midterm, fading to high-single-digit growth in the long term. AI adoption is expected to accelerate in 2025, driven by innovation. Morningstar thinks SAP’s ADRs are worth $311 each.
The second-largest holding among the best international fund managers is Taiwan Semiconductor. Taiwan Semi is the world’s largest dedicated chip foundry. Morningstar assigns the company a wide economic moat rating stemming from cost advantages and intangible assets. Taiwan Semi has long benefited from semiconductor firms around the globe transitioning from integrated device manufacturers to fabless designers. We project a top-line compound annual growth rate of 15.7% over the next five years. Morningstar thinks Taiwan Semi’s ADRs are worth $306.
The third-largest holding for the best international fund managers is Sony. Morningstar thinks Sony has carved out a wide economic moat overall, though some of its businesses are more moaty than others. Over the past decade, Sony has transformed its business model, focusing on solid and stable growth by reducing the volatility of its consumer electronics business and by aggressively investing in content for its entertainment businesses, such as music, movies, and games.
For more stock ideas, tune into The Morning Filter each week wherever you get your podcasts and visit Morningstar.com, too.
Morningstar director Kazunori Ito, senior analyst Rob Hales and analyst Phelix Lee contributed the research behind this segment.
Subscribe to The Morning Filter on Apple podcasts, or wherever you get your podcasts. https://podcasts.apple.com/us/podcast/the-morning-filter/id1792280057
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Read what our team is writing.
Susan Dziubinski https://www.morningstar.com/people/susan-dziubinski
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