BY ALEX FRANGOS

HONG KONG—Global markets are taking off, but emerging-market stocks remain far below last year's highs, and some investors are warming to their valuations.

The emerging-market bulls argue that cheap prices and healthy growth rates mean companies in Asia and elsewhere have the potential for bigger gains in coming months, should the current breather in the euro crisis hold.

After Friday's jobs-inspired rally, the Standard & Poor's 500-stock index is now just 1.4% below its peak since the Lehman crisis, which was hit April 29. Outside the U.S., the MSCI Emerging Markets index is up 14% this year but still 13% ...