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Exploring New Territory

A first look at international markets

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Misfit Alpha
Dec 19, 2023
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A Galley of Malta, a Castro, Lorenzo, circa 1680, oil on canvas (Dulwich Picture Gallery)

One idea I’ve circled a few times this year is to dig more and more into international stocks. There has been a confluence of factors leading me in that direction. One data point that I keep staring at is this chart from the Hartford Funds showing the US vs. international outperformance going back to 1975.

Source: Hartford Funds

The investor note from which this chart came mentions that the average cycle of outperformance between US and International stocks is slightly more than eight years. I don’t put much stock in this statistic. Three complete cycles is far too small of a sample size to draw definitive conclusions on cycle times. At the same time, it’s naive to think U.S. stocks will outperform international issues in perpetuity. 

The other data point piquing my interest in international markets is the declining analyst coverage of these markets. In a 2023 paper, researchers found that the universe of stocks sell-side analysts cover declined 28% from 2011 to 2021 (U.S. stock analyst coverage declined 17.8% from 2011 to 2021).

Underperformance doesn’t necessarily mean the companies have underperformed, and a lack of analyst coverage doesn’t mean the stocks in question are of worse quality. More likely, it has created ample opportunities to find mispriced assets as the Wall Street analysis machine consolidates around a smaller and smaller universe of companies that receive investor attention. 

So, let’s use the “Buffett screen” on international markets to see what we can unearth. 


I’m about to share the results from a stock screen I created using Koyfin. It is one of the many functions I find myself using daily on the Koyfin platform. It also allows me to create watchlists to track many portfolios, review a decade of financials, or compare companies on various metrics. Unleash the power of Koyfin’s platform and transform your research process by signing up for Koyfin here and receiving 10% off.

Get my 10% off Koyfin!

Disclaimer: I have an affiliate partnership with Koyfin and receive compensation if you sign up via the link above. It helps me fund this endeavor. I would still recommend using it even if I didn’t have this partnership because it’s an awesome product, but I’d be stupid to turn down a revenue opportunity. You get a discount, Koyfin gets new business, and I get a commission. Win-win-win)

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