This strong recent run, combined with weak news on the U.S. economy, is the reason I expect some pull back in the markets this week and next. Markets are also entering the traditionally quiet period of the summer months. Our strategy will be to tighten our stops to lock in some of our well-earned profits. We’ll also be saying good-bye to the longest-term holding in our Global Bull Market Alert portfolio.
MILLICOM INTERNATIONAL (MICC)
Millicom has been in our portfolio since last August. With the stock up over 111% since our recommendation, Millicom has been a big money maker for our Global Bull Market Alert portfolio.
Last week, Millicom announced record profits and very strong subscriber growth numbers that cannot fail but to impress. Millicom’s subscribers increased 94% over Q1 — boosting its total subscribers to 16.5 million. Its revenues shot up 86%, while its EBITDA rose 74% and earnings jumped almost 11-fold to $3.43 per common share.
Make no mistake about it, Millicom remains one of my favorite long-term global plays. But today, I am moving Millicom out of the Global Bull Market Alert portfolio. If you are a long-term investor, hold on to the stock and place a trailing stop of 25%. I firmly believe Millicom will continue to be a big winner over the next few years.
ICON PLC (ICLR)
ICON is now up over 14% in two short months. Shares of this Ireland-based provider of clinical development services to drug and medical device makers rose to an all-time high Tuesday, after its Q1 profit handily beat Wall Street estimates.
Revenue rose 38%, while earnings per share hit 42 cents to beat expected earnings per share of 39 cents. ICON also raised its revenue guidance for the year to a range of $560 million to $580 million.
I expect ICON to continue to surprise on the upside. Move your stop to $41.75
NII HOLDINGS (NIHD)
NII Holdings announced record profits last week. Sales jumped 35% and earnings were up an even more impressive 65%. I participated in management’s conference call last week and I can confirm that the executives sounded extremely bullish about the company’s future.
We’ve already made profits of close to 10% on the stock since early February. And, we took profits of 29.82% on our NII call options last week. With NII Holdings adding 289,000 net subscribers during the first quarter of 2007 — bringing its base to more than 3.7 million customers — we still have almost 25% to go to reach our target price of $100. Move your stop to $73.75.
Allianz is up almost 10% since our recommendation in mid-March. That’s an annualized rate of over 95%.
This German insurance giant is benefiting tremendously from the one-two punch of the strength in the German market and the depreciation of the dollar against the euro. I expect Germany to be a strong and steady performer for the rest of the year, with Europe growing faster than the United States for the first time in recent memory. Move your stop to $21.10.
Last week’s recommendation, Russian mobile play Vimpelcom, is already up 2.75%, with the call options jumping a solid 13%.
Vimpelcom announced last week that it plans to buy back 1.6 million American Depositary Shares (ADS) or 0.8% of its common outstanding stock before 2009 for its stock-based compensation awards. Whenever management purchases its own stock, it shows faith in the company and also supports the stock price. Hold on to Vimpelcom for more gains.
COMPANHIA VALE DO RIO DOCE (CVRD) (RIO)
Brazilian mining group (CVRD) announced last Thursday that its board approved an increase in its 2007 investment budget from $6.33 billion to $7.35 billion. This increase confirms that this favorite stock of George Soros has plenty of growth left. CVRD also announces earnings this week and we should see significant movement in the stock. I will keep you posted about any significant developments.
Otherwise, Warren Buffett-favorite Posco Steel (PKX), in which we took options gains of 48.81% last week, and emerging European giant National Bank of Greece (NBG) both remain buys at these levels. Our position in the Japanese yen (FXY) should continue to offer a hedge against any coming market weakness.