These reliable, growth-oriented stocks have been disregarded by international investors

Three cheap stocks with room for long-term growth are chosen by Nedgroup Investments' investment specialist, Nisha Thakrar

The Nedgroup Investments Contrarian Value Equity Fund provides long-term investors with a definite alternative in the current climate of increased uncertainty and short-term noise. Our philosophy is based on patience and strong convictions. We're not buying cheap stuff or trying to stir up controversy. Identifying long-lasting companies that have the potential to compound profits over time is our goal. We create a portfolio of 30 to 50 global businesses using a strict bottom-up methodology that has strong fundamentals, including tenable competitive positions, distinct growth trajectories, reliable management teams, and healthy balance sheets.

We believe that careful position sizing, stock selection, and valuation discipline at both entry and exit are the keys to investment returns that surpass the benchmark index. We gradually increase our positions after evaluating long-term intrinsic value across a variety of scenarios, paying special attention to downside risk. When others might back down, we can strengthen our convictions with this long-term, emotionless approach. We search for misunderstood companies with undervalued long-term earnings potential and mispriced quality. This mentality is evident in three new additions to the portfolio.

Three stocks to keep an eye on.

Recently spun off from Holcin, Amrize (NYSE: AMRZ) is a building materials company with a focus on North America, where long-term demand is supported by secular tailwinds like onshoring, infrastructure investment, and the lack of available housing. With over 1,000 locations and substantial mineral reserves, it enjoys the advantages of scale, vertical integration, and close proximity to important markets.

We've worked with this management team for the duration of our long-term investment in Holcim, and we think that through strategic acquisitions and the company's disciplined capital allocation and operational effectiveness, Amrize will be able to increase earnings over time. Amrize is still undervalued when considered as a stand-alone company, which presents a rerating opportunity as the market starts to discern its actual worth.

Leading the world in commercial refrigeration and ice-making equipment, Hoshizaki (Tokyo: 6465) supplies supermarkets, convenience stores, restaurants, and hotel chains. Despite having its headquarters in Japan, its reach is worldwide. The company's enduring competitive advantage in a fragmented market is derived from its strong brand, dependable products, and established relationships with distributors. Hoshizaki offers stable profits due to the industry's long-term growth and consistent demand for replacement products. Its engineering-led culture and conservative balance sheet encourage margin growth through global sourcing and automation.

A "picks-and-shovels" company for the healthcare industry, Becton Dickinson (NYSE: BDX) supplies hospitals, labs, and research facilities with necessities like syringes, catheters, and laboratory equipment. Becton Dickinson is a world leader in many of these categories, which have high regulatory and trust barriers. Its steady income stream is more in line with long-term healthcare and demographic trends and less susceptible to fluctuations in the economy. Consistent earnings growth is supported by focused patient safety, disciplined mergers and acquisitions, and growth into emerging markets. Our portfolio's durable compounder is Bectons' capacity to innovate while upholding operational discipline.