Nicholas Vardy

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

As the market endured its worst week in four years last week, it capped what has turned out to be the weakest three months in U.S. stock markets since 2004. That’s an abrupt about face, as the market was setting record highs only two weeks ago.

Our Global Stock Investor portfolio held up reasonably well. Millicom International (MICC), one of my favorite growth stories, and the Sweden ETF (EWD) both hit our stop prices in the midst of last week’s market turmoil. Shares of Millicom dropped nearly 19% last week, but the stock already has bounced back substantially since then. Ditto for Sweden. That’s why I want to keep these two on our radar screen — and I likely will be looking to re-enter our positions — as the market stabilizes during the next few weeks.

Overall, the fundamentals of our picks remain strongly in place as both ABB Ltd. (ABB) and Arcelor Mittal (MT) announced better than expected earnings in the past week. The market may be touch and go all the way into October, but I expect all of our positions to rally strongly into the fourth quarter.


ABB Ltd.‘s (ABB) second-quarter profit nearly doubled on strong growth in sales and orders to beat analysts’ already high expectations. Net profit in the three months through June rose to $729 million, compared with $367 million in the same period a year ago. Sales rose 27% to $7.14 billion. Orders jumped 26% to $8.67 billion. Demand remains robust across the board in all of ABB’s businesses and in all regions globally. With the stock flat since our initial recommendation, it’s a perfect time to BUY.

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America Movil (AMX) had climbed 45% in 2007 before the sell off last week, when the stock fell in tandem with global markets. The key take-away from the company’s recent second-quarter results is the resilience of subscriber growth and improving margins in Brazil, where AMX also gained market share. Overall, the second-quarter for America Movil was positive and there’s still a lot of opportunity for growth in Latin America. The stock remains a BUY.

The restructuring story at mining group Anglo American (AAUKD) picked up pace this past week as the CEOs of two Anglo American subsidiaries — AngloGold Ashanti and Anglo Platinum Ltd. — both retired. AngloGold said its chief operating officer also is leaving the company in September. Anglo American’s new CEO Cynthia Carroll has been pushing ahead with the company’s refocusing on core mining operations, while introducing management changes to help Anglo American sharpen its game. Also note that Anglo American changed its symbol to AAUKD this week. This play on the commodities super cycle remains a STRONG-BUY.

Home Inns & Hotels Management (HMIN) announced that it plans to quadruple the number of its hotels to 1,000 during the next few years. Home Inns, which today owns 242 hotels in 67 Chinese cities, is in talks with the China Post Group, operator of the country’s postal system, to purchase some properties to convert into hotels. China Post has been selling assets to focus on its core operations and it put 30 hotels up for sale in March. Asked about reasons for the recent weakness in the company’s stock price, a Home Inns spokesman responded: "We have no idea. There’s nothing negative as far as I know." The company is due to announce first-half earnings on Aug. 15. It remains a HOLD.

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Indian banking play ICICI Bank (IBN) dropped last week along with the rest of India’s equity market, mirroring global losses. Yet the fundamentals of the market remain strong. Interest rates have peaked. Foreign money is pouring into the country. In July alone, foreign institutional investors pumped $5.81 billion into the Indian market, with $10.16 billion coming into the country since January. That’s a huge leap from the investments of $7.99 billion for the entire calendar year 2006. We remain positive on both India and ICICI bank. The stock is a BUY.

Global steel giant Arcelor Mittal (MT), the world’s largest steelmaker, reported second-quarter core profits above expectations today on the back of strong demand and higher selling prices. Net profit rose about 50% to $2.723 billion on an increase in sales of more than 20% to reach $27.223 billion. Analysts forecasted a net profit of roughly $2.4 billion on sales of $25.89 billion.

The group also delivered on promised synergies. Arcelor Mittal reported it already had captured $973 million in synergies in the first half of 2007. That’s a substantial chunk of the $1.6 billion it promised. CEO Lakshmi Mittal said he expects a robust end to 2007. The stock is a BUY.

Finally, Tesco (TSCDY) remains a BUY at current levels.

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