It was another strong week for most of our Global Stock Investor portfolio holdings — with Anglo American (AAUK), ArcelorMittal (MT), America Movil (AMX), the iShares MSCI Brazil Index (EWZ), ICICI Bank (IBN) and Tesco (TSCDY) all hitting record highs.
While our Global Stock Investor portfolio has racked up big profits, this has not been the case for all equity investors across the board. Since the market bottom on Aug. 15 to the closing prices on Thursday, Sept. 27, there has been a huge disparity in returns based on where you’ve invested in the world. Over this 30-day period, emerging markets have put up tremendous returns on a relative and an absolute basis. The S&P 500 was up 8.5% in the last 30 days or so from the August closing low. In contrast, the iShares MSCI Emerging Markets Index has surged almost 25%.
That said, I expect some type of pullback in the next week or so, as the market consolidates its record gains. But look for the gains to continue as we benefit from the traditional Q4 surge.
Anglo American (AAUK) hit yet another record high on Monday. The world’s second-largest gold mine owner is reducing its stake in AngloGold by more than half to 17.3%, down from 41.8%, as it continues to streamline its holdings to focus on core businesses. The company announced that it plans to raise $2.9 billion from the sale. Our #1 play on the global commodities boom is a BUY.
ABB Ltd. (ABB) breached the $27.00 level for the first time ever this week. There are rumors that it may be expanding its operations in North America by acquiring Belden Inc., North America’s second-largest maker of electronic cable. ABB remains a BUY.
America Movil (AMX) hit a record of $66.42. Look for an extraordinary dividend of up to $5.00 per share this quarter. AMX is a BUY.
iShares MSCI Swedish Index ETF (EWD) is one of our few holdings that has not fully recovered from the summer swoon. But this safe and steady play benefits from both market reforms and a depreciating dollar. It remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) broke out to new 52-week highs and it is up 10.35% since we first recommended it only two weeks ago in this month’s Global Stock Investor. Investors are buying this one on the dips as EWZ topped the list on Friday among stocks that fell in price but had the largest inflow of money. The ETF is a strong momentum play and a BUY.
CurrencyShares Japanese Yen Trust (FXY) is our defensive, cash-style holding that acts as a hedge against market declines. It is a defensive BUY.
ICICI Bank (IBN) is relentless, soaring another 7.93% to record highs, as the Mumbai Stock Exchange breaks record highs almost every day. ICICI Bank also announced that it is planning to launch a fund of funds that initially will target private equity funds that focus on India. This so-called "India Citibank" is a BUY.
Millicom International (MICC) is slowly working itself back toward its summertime highs, and it is up 11.41% during the past two weeks. Millicom Sierra Leone Limited announced a 20% reduction in its international tariffs for its existing and potential customers. This reduction makes Millicom’s Tigo the most affordable player in Sierra Leone’s mobile phone industry. With earnings coming up in about two weeks, Millicom is a BUY.
ArcelorMittal (MT) hit $80 on Monday, before falling back slightly yesterday. The world’s largest steel company is consolidating its hold over the Latin American market, after announcing that it would complete its takeover of Argentina’s Acindar. ArcelorMittal announced that it would acquire the 34.7% stake of the Argentine steel maker that it does not already hold for $542 million. The stock is a BUY.
Tesco (TSCDY) announced Q2 earnings this week, as the stock hit a record high of $28.55 yesterday. Sales in the first half increased by 9.2% and underlying profit before tax has grown by 14.3%. Underlying diluted EPS was up 17.2%, benefiting from strong property profits, a lower tax rate and the effect of the share buyback. Sales in Tesco’s international division have increased strongly to rise 22% in the first half — aided by a first-time contribution from China. The stock is a BUY.
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