Veteran investor picks 'Glorious 10' global stocks with 30% annual gains over the last 5 years

Published Sun, Mar 3 20246:35 PM ESTUpdated Fri, Mar 8 202412:30 AM EST

Amala Balakrishner @in/amala-balakrishner @_amalabk

U.S. Big Tech names were stand-out performers last year as investors piled into the so-called " Magnificent Seven " stocks: Alphabet , Amazon , Apple , Meta Platforms , Microsoft , Nvidia and Tesla . These shares – collectively – were behind much of the gains that drove the benchmark S & P 500 Index up by almost 25% in 2023 . However, veteran investor and trader Adam Reynolds says it's time to look beyond the U.S. and consider 10 lesser-known companies from across Europe, Japan and Australia. "The focus on U.S. tech stocks — and especially the Magnificent Seven — is driving huge amounts of performance to the U.S. stock market. It is blinding people to the risks with focusing on U.S. tech, as well as the need for diversification," the APAC CEO of Saxo Capital Markets told CNBC Pro on Feb. 29. Calling valuations of U.S. stocks "stretched," Reynolds said there are opportunities in moving toward a "more diversified global portfolio," including better valuations — and returns. He named his "glorious 10 stocks," which each have a market capitalization of over $50 billion. According to Factset data, each of the stocks has posted a total growth rate of at least 30% annually over the last five years. In terms of allocation, Reynolds suggests that investors put 30% of their equities portfolio in U.S. stocks, 40% in Asia and 30% in Europe. Within Asia, Reynolds says Japan offers "pent-up opportunities" given its weak currency and the earnings potential of its stocks. Meanwhile, he described Europe as a "super interesting space with pockets of very good companies that are becoming market leaders." Chip stocks Shares of semiconductor manufacturer Tokyo Electron are up over 140% over the last 12 months. It has the highest total returns on Reynolds' list — with an annual compound growth rate of 53% over the last five years, according to Factset data. Reynolds describes the stock as a "superb performer" and says it is a notable competitor to U.S. chip giant Nvidia . ASML , which produces chip-making machines, also makes the list. Shares in the Dutch company are up nearly 50% over the last year. "We're going through what people would think of as a sort of super cycle in semiconductors, and everyone's piling into the semiconductor industry. And of course, Nvidia is the poster child for that," Reynolds said. "But we're probably going to end up with a significant oversupply on that one, so Tokyo Electron and ASML stand to gain from that," he said. Weight-loss drug maker Elsewhere, shares of pharmaceutical firm Novo Nordisk have risen more than 65% over the past 12 months, thanks in large part to the excitement over the potential of its diabetes and weight-loss drug Ozempic. "Novo Nordisk needs no introduction, it is a very high-quality company," Reynolds said on Europe's largest firm by market capitalization. Autos Reynold also has his eye on BYD , even as shares in the Chinese automaker edged down nearly 14% over the last year. "The speed with which the Chinese car companies are starting to be able to improve their quality is amazing. And BYD is at the forefront of that," he said. The Tesla rival recently turned heads with the launch of the U9, a new electric supercar that it says can hit similar speeds to high-end models produced by industry giants like Ferrari .