Tim Seymour:  Emerging markets valuations are in an extraordinary place right now, but cooling global growth will make everyone question whether current earnings are sustainable.

At this year’s profitability levels, the iShares MSCI Emerging Markets Index ETF (NYSE:EEM) currently trades at a P/E of 9.2. This is value territory:

Of course, next year’s earnings could go anywhere. But if you believe that emerging markets are still developing faster than their debt-challenged counterparts in North America and Western Europe — and despite declining targets from the big banks, everyone still concedes this — then growth is likely to hold up a lot better in the emerging world than anywhere else.

I like Turkey (NYSE:TUR) and Brazil (NYSE:EWZ) most. These markets were the most beaten up coming into the recent slide, and now look the cheapest.

From a macro perspective, interest rates have either peaked in these countries or are coming down. Inflation pressure has been high in both Turkey and Brazil, but is receding now.

Domestic policy has worked. Global developments are taking the edge of import prices off these economies, giving them room to quietly hit the gas pedal again.

Banks are the best positioned plays in either market. Lenders cannot help but improve their lending and net interest margins — and that should make their overall valuations even more attractive.

Garanti (TKGBF) and Bradesco (NYSE:BBD) are our favorites:

Or take a bigger step outside the known and go to Peru and Argentina, where you have huge dividend plays like Banco Macro (NYSE:BMA) and Credicorp (NYSE:BAP) yielding 7% and 2%, respectively.

Throw in the fact that there have been serious redemptions in these markets, and you are looking at something like 5 times earnings or 1.5 times book value on tickers like BMA.

Argentina, needless to say, is doing tremendous business despite a difficult global economy.

And in Peru, forecasts of 6% to 7% GDP growth are doing great things for Credicorp. The stock is not exactly cheap on an absolute basis — trading at 12 times earnings — but valuation has not been so low since September 2008.

Lending is up 20% year over year and delinquencies have hit a low of 1.5%. Credit quality in Peru seems fine. This is not a stock in trouble.

Written By Tim Seymour From Emerging Money

Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.

About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.

NYSE:EEM, NYSE:EWZ, NYSE:TUR