A Passage to Indian Profits

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

This is ironic. After all, it is India that is better known for its high-tech brains while China is known more for its manufacturing brawn.

Perhaps unsurprisingly, Baidu is down about 40% from its initial peak, while the Indian internet sector has almost doubled over the same period. Despite this rip-roaring price performance, the valuation on the Indian companies remains more attractive than the Chinese favorites.

This week’s Global Bull Market Alert recommendation is one of India’s leading internet portals, Sify Ltd. (SIFY), which also doubles as one of India’s leading e-commerce companies.

Here’s why we think Sify will continue to outperform its higher-profile Chinese rivals:

Sify is more than just a search engine or a portal. It provides a wide range of products and services delivered over a common internet backbone infrastructure, reaching 146 cities and towns in India. A significant part of the company’s revenue is derived from corporate services. Sify also provides consumers with broadband home access and dial-up connectivity, and it runs the iWay cyber café chain across 132 cities and towns.

Equally important, Sify has just received a vote of confidence from Infinity Capital Ventures, a leading Silicon Valley venture capital fund. Controlled by Raju Vegesna, a highly respected Silicon Valley entrepreneur who has founded several leading edge technology companies in the U.S., Infinity Capital’s investment will leave Sify with $62 million in cash on its balance sheet.

Infinity Capital is "smart money." It made its investment in Sify when the stock was at $5.60 on November 10. Sify closed at $8.72 this past Friday, a gain of 55% in just over a month.

An investment in Sify is similar to Elan, the Irish biotech company on whose options we took a quick 70%+ profit over nine days. Our stop price is $5.80.

Exclusive  Your Portfolio Is 10 for 11 as Global Markets Rally

If you find this sector’s volatility dizzying, take half your normal position size in this one to manage overall portfolio volatility. For potentially quick profits stemming from strong short-term moves, buy the March $10 options (SUYCB.X).

Portfolio Update

Since we’re nearing the end of the Austrian market’s strong seasonal period, let’s say good-bye to the Austrian ETF (EWO) we recommended back in October. We close that position taking profits of over 8%, equivalent to annualized gain of over 68%!

Our Global Bull Market Alert picks continue on a healthy fourth quarter uptrend, so move your stops on Mitsubishi UFJ (MTU) up to $11.80, Norsk Hydro (NHY) up to $99.50, and NII Holdings (NIHD) up to $39.40.

Special Bonus Recommendation for Options Investors

Although we sold the last of our America Movil (AMX) options to book a 125% gain last week, we are still holding the stock. If you want to continue to profit from the AMX’s upwards trajectory (investment bank UBS’s target price is $38), buy the May $35 options (AMXEG.X)

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Elan (ELN), last week's Global Bull Market pick, has been on a tear, with the stock rising almost 17% over the past three days, and is up 19% since we recommended the stock on November 29th.

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