SOUTHERN COPPER (PCU) — SELL POPULIST PERU
Despite record copper prices, PCU — our international copper mining play — has failed to soar alongside the red metal’s recent meteoric price rise. The reason? Populist Ollanta Humala, a Hugo Chavez-like candidate, has surged ahead in Peruvian election polls last week. With Humala promising to increase taxes on oil, gas and mineral production, the newfound uncertainty of the election outcome on April 9th is weighing on PCU’s stock price. Better to take a small loss here until the dust settles. Sell PCU at market today.
RIO TINTO (RTP) — TAKE PROFITS ON OPTIONS AND ENJOY THE DIVIDENDS
Australian stocks are soaring to record highs, with the benchmark index bursting through the critical 5000 level last week. RTP, a diversified global commodities play, gained 2.4% overnight in Australia and should breach the $200 mark in today’s trading. Take your 40%+ profits in half your RTP options and hold onto to the stock for even more gains. Move your stop up to $184.80. Also, look for your dividend payment of $6.06 per share on April 7th for a yield of over 3% based on your purchase price. Not a bad return for the six weeks that we’ve held the stock.
TURKCELL (TKC) — DIVIDEND DELIGHTS
Turkcell, the Turkish cell phone provider, announced on Friday that it will distribute a dividend payment of 51 cents per ADR on April 28th. That’s a yield of about 3% based on your purchase price of $17.15 in just three weeks. The prospects for this fast growth play continue to be outstanding. Move your stop up to $15.80.
GOL LINHAS INTELLIGENTES (GOL) — MORE GROWTH IN THIS BRAZILIAN BULL
We’ve already scored big with Brazilian discount airline GOL, taking a 70% profit on options within two days of our initial recommendation. Last week, the most profitable airline in the world announced that it expects to boost its share of the country’s domestic air travel market to at least 35% from the current 29% share by the end of this year. GOL plans to add 16 jets to its fleet this year to reach that goal. About 9 million Brazilians take passenger flights every year, but the market could reach 20 million, so there is plenty of growth left in this Global Bull Market story. Move your stop up to $25.25.
ASIAN BROWN BOVERI (ABB) — ANOTHER EVOLVING CHINA PLAY
Multinational engineering giant ABB is slowly morphing into a China play. Last week, it announced that China has surpassed Germany to become ABB’s second largest market. ABB built five factories in China in 2005, employing 1,000 more people and expects to expand its business in China by 20% annually until 2008. Move your stop to $10.90.
SONY (SNE) — THE RIGHT COMPANY IN THE RIGHT MARKET
Despite announcing a delay of the launch of Play Station3, Sony’s CEO is making all the right noises in leading the company’s turnaround. In addition, at last week’s London Junto, our panel of Japanese experts underlined that the big picture case for Japan could hardly be stronger. Expect big profits over the next three to five years in the turnaround of the Japanese stock market.
COGNIZANT (CTSH) — PROFITING FROM THE INDIAN OUTSOURCING MEGATREND
On the heels of Dell, Deutsche Bank today announced that it is outsourcing half its back-office operations to India, a megatrend from which CTSH is set to profit handsomely. Up 2.5% since we recommended it last week, CTSH is on its way to $60. Move your stop up to $53.40.