Even after yesterday’s sharp sell off in global markets, our Global Stock Investor portfolio ended the week with a slight gain. Before that, though, five of our eight holdings hit record highs.
As I noted last week, any strong upward trend in our stocks over the next few months will be a welcome surprise. July and August have been traditionally the flattest time of the year, with most global stocks traditionally treading water until the Q4 surge.
PORTFOLIO UPDATE
America Movil (AMX) ended the week slightly down. Overall, Latin American markets are the top global performers this year. Latin American funds tracked by Morningstar were up a whopping 60.06% over the past three years. In comparison, U.S. diversified stock funds are up 11.05% year to date and up an average annual 14.01%. Latin America funds took in $4.9 billion in new money during the first half of this year vs. $1.54 billion during the same period last year, according to global fund flow tracker EPFR Global. With America Movil up over 30% since February, we are benefiting from Latin America’s new found popularity. The stock remains a STRONG-BUY.
After hitting a record high on Monday, mining group Anglo American (AAUK) fell back slightly, but still ended the week up. The stock will continue to be boosted by higher prices for gold and a positive outlook for commodity prices and mergers and acquisitions activity. Anglo American — our #1 pick on the global commodities super cycle — remains a STRONG-BUY.
Home Inns & Hotels Management (HMIN) was our top performer of the week — up a solid 6.4%. Our top play on the Chinese Olympics has tested our mettle in the past, but is starting to look technically stronger and stronger. For now, though, it remains a HOLD.
Indian banking play ICICI (IBN) also hit a record high of $51.95 on Monday, before falling back on yesterday’s sell off. Although not cheap, India’s Citibank is growing at 30-35% per year as far as the eye can see, and is a BUY at these levels.
Global cell phone operator Millicom International (MICC) punched through the $97 level last Friday before falling back. This little known stock is nudging toward the $10 billion market cap mark. Ticking up at an annualized gain of more than 85% since our initial recommendation, the stock has many billions of dollars in market cap to go. Millicom is a STRONG-BUY.
Global steel giant Arcelor Mittal (MT) is finding its feet, after hitting a record high of $67.20 on Monday. Deutsche Bank just upgraded the stock to outperform and noted that underlying demand for steel is now accelerating due to increasing infrastructure investments, high manufacturing activity and production capacity expansion. European demand is strong and operating rates are expected to remain high to enable producers to maintain margins and to increase profitability. Continue to BUY on the dips.
Tesco’s (TSCDY) stock continues to be on sale. Continue to load up, before the good news comes in from the United States toward the fourth quarter. A bet against Tesco is a bet against Warren Buffett. And with the dollar hitting a 28-year record low against the British pound, Tesco is an even stronger BUY.
The Swedish ETF (EWD) also hit a record high on Tuesday. You can sleep soundly owning this one. Up over 17% since we purchased it, this investment should be up at least 25-30% before the clock strikes midnight on January 1, 2008. It remains a solid BUY.
