And with holdings across all the major regions of Asia, Latin America, and Europe, our portfolio is not only well-diversified geographically, but also well-positioned to benefit from the coming recovery in global equity markets.
Last week’s pick, South Korean steel play Posco is up almost 5% in its first week, with the options up 32.14%. And remember, Posco also boasts a 3.2% dividend yield that the company has increased every single year in the past five years.
There is more good news. The United States and South Korea concluded a landmark free trade agreement early this morning, culminating 10 months of negotiations in a final week of intense haggling. South Korea and the United States agreed to lower trade barriers in a wide range of industrial goods and services, including financial services. The deal, once approved by lawmakers in both countries, will be the biggest for the United States since the North American Free Trade Agreement, which took effect in 1994.
NII HOLDINGS (NIHD)
Reston, Va.-based NII Holdings, which sells a Nextel-branded wireless service in South America, reported blow-out results in late February. Wireless service sales rose more than 30% to $650 million. Fourth-quarter 2006 income more than doubled year-over-year to reach $107.9 million, up from $49.4 million. NII Holdings also ended the year with 3.4 million subscribers, adding 225,000 new subscribers in the final quarter of the year and expecting to gain another 1.2 million subscribers in 2007.
This European insurance giant has proven to be a steady performer. With a forward P/E of 9.65, it remains a bargain in the European mega-cap world.
Allianz is also a terrific top down play on economic recovery in Europe. Its home turf of Germany and Europe is boasting ever better economic numbers. German business confidence has hit historic highs this month, shrugging off fears of a U.S. economic slowdown. The eurozone is enjoying a near-perfect economic recovery with confidence hitting fresh highs. Unemployment is at a record low and inflation is in check. The eurozone "economic sentiment" index leapt to its highest since January 2001.
CURRENCY SHARES JAPANESE YEN TRUST (FXY)
The function of our Japanese Yen currency play is to zig, while the rest of our portfolio zags. Note how this position performs best when the market has a bout of nervousness. From a fundamental standpoint, the Japanese currency remains the most undervalued currency in the world (by about 28% according to the Economist‘s "Big Mac" index). As the Bank of Japan inevitably raises rates, the currency will resume its path upward.
MILLICOM INTERNATIONAL (MICC)
Global cell phone play Millicom International is up 96.5% since our initial recommendation. Here’s why I think it remains one of the best telecom plays around. Top line growth is an impressive 85%; it’s maintaining outstanding margins; and it boasts an amazing 61% return on equity. And with insiders holding 39% of the stock, you can be sure Millicom is run to maximize management’s wealth — whether through internal growth or a trade sale. With Millicom operating in the fastest-growing cell phone markets in the world, there is only one direction this stock can continue to go.
ICON PLC (ICLR)
Irish biotech play ICON plc’s strong growth prospects continue unabated. Growth in clinical research will ensure continued demand for ICON’s services. This is one of our more volatile plays, but all the fundamentals are in place for continued upside.
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