Many investors limit their exposure to foreign equity markets to mutual funds or exchange traded funds. However many online brokers allow traders to buy or sell stocks globally at a very low cost. That makes it possible for individuals to buy undervalued growth stocks in emerging markets directly, and that could lead to bigger gains than mutual funds or ETFs.

Ilshin Spinning is available on the Korean Stock Exchange under the symbol 003200:KS. The company is primarily a manufacturer of cotton, blended yarns, knit, and fabrics. In addition to serving local markets, the company exports products to Japan, America, Australia, and China. Like many Korean companies, it is also diversified into other businesses. Ilshin Spinning also provides financial services through its subsidiaries and retails The Body Shop in Korea.

The company’s stock was recently trading for about 81,000 Korean won, or about $71 a share at the recent exchange rate of 1,138 won per dollar. While it may be tempting to trade low-priced stocks, when considering overseas investments higher priced stocks will usually offer better value. In the case of Ilshin, the stock is undervalued by many fundamental measures.

Ilshin is trading at about 7 times earnings and offers a dividend yield of about 1.2 percent. Its price-to-sales ratio is only about 0.3, as is the company’s price-to-book (P/B) ratio. The P/B ratio indicates that Ilshin is trading at a price that would allow investors to collect about 30 cents on the dollar for its assets if the company was broken up.

Korean stocks in general are trading with a price-to-earnings (P/E) ratio of about 10, so Ilshin is undervalued in its home market as well. Other macroeconomic factors that favor this investment include the fact that the Korean currency has been moving higher against the US dollar and that indicates the country’s economy is stronger than the US economy. Analysts at Wells Fargo Economics Research expect South Korea’s economic growth to slow by about a percentage point, to 2.6 percent in 2012. In the fourth quarter of 2011, Korea’s gross domestic product (GDP) was up 3.4 percent. Inflation was relatively tame at about 3.1 percent in February, after trending above 4 percent for much of 2011.

Ilshin represents in a value stock in an emerging market with a long history of growth. It could deliver gains for investors as the company grows earnings, as the Korean economy expands, and as the Korean currency gets stronger relative to the US dollar.