Investors spend most of their time chasing what’s popular: mega-cap tech stocks, momentum trades, or whatever happens to be trending on CNBC. But the biggest opportunities often lie where few are looking. That’s where the combination of Joel Greenblatt’s Magic Formula and Joseph Piotroski’s F-Score shines brightest: in uncovering cheap, profitable, strengthening companies that the market hasn’t yet noticed, especially abroad.
Greenblatt’s Magic Formula is elegantly simple. It ranks companies based on 2 powerful criteria: high return on capital and low earnings yield (the inverse of the P/E ratio). The formula consistently identifies companies that generate strong profits but trade at depressed valuations. In other words, it finds good businesses at bargain prices.
Piotroski’s F-Score adds another dimension of quality and safety. It evaluates companies on 9 measures of improving profitability, leverage, liquidity, and operating efficiency. High-scoring companies are financially sound and trending in the right direction. When combined, these 2 systems yield a potent strategy: companies that are cheap and getting better.
This approach becomes especially effective outside the United States. Foreign markets are less efficiently priced, with far less analyst coverage. Many international businesses trade at steep discounts to comparable American firms, not because of weak fundamentals, but because of neglect. The Greenblatt-Piotroski combination lets us sift through these ignored markets to find undervalued, financially strong companies poised for a rerating.
Today, we spotlight 3 such opportunities that pass our global value filter: Grupo México (GMBXF), WH Group (WHGRF), and JBS (JBS). All trade cheaply, all show improving financials, and all fly well below Wall Street’s radar.
Grupo México (Ticker: GMBXF): The Latin American Infrastructure Powerhouse
Grupo México is a titan of Latin American industry, controlling vast mining, rail, and infrastructure assets across the region. It ranks among the world’s largest copper producers through its Southern Copper subsidiary, operates one of Mexico’s most important railway systems, and continues to expand in energy infrastructure. Yet on U.S. markets, it trades quietly on the OTC under GMBXF: barely followed, deeply discounted, and largely misunderstood.
Under the Greenblatt lens, Grupo México looks exceptional. Its mining and transportation divisions deliver strong returns on capital, while the stock’s low earnings multiple gives it a high earnings yield. The Piotroski side of the equation is equally encouraging. Cash flow and profitability remain solid, leverage is manageable, and operating efficiency continues to improve.
What makes this company special is its balance between cyclical and recurring earnings. The mining segment benefits from long-term global copper demand, driven by electrification and energy transition trends. Meanwhile, its transportation and infrastructure arms generate consistent, toll-like cash flow. At roughly book value and a yield near 3%, the stock looks like a rare blend of growth potential, income, and deep value. As global industrial investment accelerates, Grupo México could easily rerate to a valuation more in line with its global peers.
WH Group (Ticker: WHGRF): A Global Protein Giant Hiding in Plain Sight
WH Group is the world’s largest pork producer and processor, best known for owning U.S.-based Smithfield Foods. From China to Europe to the Americas, it operates across every stage of the protein value chain: farming, processing, packaging, and distribution. Yet despite its global footprint and consistent profitability, the stock trades at barely 7 times earnings and remains almost entirely off Wall Street’s radar.
Greenblatt’s Magic Formula flags WH Group for its combination of high returns on capital and deeply discounted valuation. Piotroski’s framework strengthens the case. Profitability has improved following operational restructuring, debt levels have declined, and free cash flow has grown steadily. WH Group’s strong financial foundation and commitment to buybacks underscore a management team focused on long-term shareholder value.
From a thematic standpoint, WH Group sits at the intersection of global protein demand and improving supply-chain efficiency. As middle-class consumption continues to rise across Asia and as the company modernizes its operations, margins and returns are poised to climb. Investors still price it like a commodity producer, but in reality, WH Group is a diversified global food company. As sentiment toward Chinese and Hong Kong-listed equities improves, WH Group could easily double from current levels.
JBS (Ticker: JBS): Brazil’s Global Protein Empire
JBS is one of the world’s largest food producers, rivaling or surpassing giants like Tyson Foods in global reach. Based in Brazil, JBS processes beef, pork, poultry, and prepared foods across 5 continents. The company’s diversification and vertical integration give it a scale advantage that few competitors can match. Yet the market continues to treat it like a cyclical commodity stock.
Under the Magic Formula, JBS scores well thanks to high returns on invested capital, strong cash flow generation, and a valuation that remains far below peers. The Piotroski overlay confirms strengthening fundamentals. Leverage has fallen, profitability is rising, and cash generation remains robust even amid volatile commodity cycles.
Recent moves signal a long-term strategy aimed at stability and global leadership. These include expanding into higher-margin product lines and diversifying protein sources. Analysts now project roughly 50% upside based on improving fundamentals and valuation normalization. To be sure, governance and environmental concerns have clouded sentiment in the past. However, JBS has made meaningful progress on transparency and sustainability. For investors with a long horizon, it represents one of the most compelling value opportunities in the global staples space.
The Big Picture: Profiting from Neglect
All 3 companies share the same DNA: high returns on capital, strong financial improvement, and valuations that make little sense given their earnings power. They’re profitable, stable, and expanding, but they operate outside Wall Street’s field of vision.
That’s exactly where the Greenblatt-Piotroski strategy thrives. By systematically focusing on what’s cheap, profitable, and improving, investors can exploit global inefficiencies that most market participants overlook. The U.S. market remains expensive, crowded, and momentum-driven. But abroad, disciplined value investors can still find bargains hiding in plain sight.
When you combine Greenblatt’s logic (good companies at cheap prices) with Piotroski’s insight (financial strength and improvement matter), you get a roadmap for discovering foreign stocks with market-beating potential. These aren’t stories built on hype or hope. They’re grounded in numbers, discipline, and patience.
In a world obsessed with the Magnificent 7, we’ll keep hunting for the Magnificent 70: quietly compounding profits across the globe while Wall Street isn’t paying attention.
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