Overall, your Global Stock Investor holdings pulled back this week, after a strong run since late March. Your previous top performer, Potash (POT), dropped sharply from last week’s record highs as some analysts suggested that the stock had gone too far, too fast. Potash may show some weakness in the next month or so, but its target price still is comfortably above its current levels.
The pullback in Transocean (RIG), the iShares MSCI Brazil Index (EWZ) and steel giant ArcelorMittal (MT) also are good opportunities to add to your current positions. Overall, five out of your 10 positions still are showing double-digit percentage gains as of yesterday’s close.
Because of the weakness in the gold price, I am moving Barrick Gold (ABX) to a HOLD. All of your other positions remain BUYS.
PORTFOLIO UPDATE
Barrick Gold (ABX) headed down this past week, as the gold price fell to as low as $873.80 — its lowest level since Jan. 22. With ABX now so near our stop price of $36.00, and the stock breaking down technically, I am moving this stock to a HOLD.
Coca-Cola Hellenic Bottling (CCH) traded flat on no particular news. The recent weakness in the stock is an opportunity to BUY.
PowerShares DB Agriculture (DBA) continues to be your best hedge against rising prices in your local supermarket. DBA remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) dropped on general market weakness. New oil finds and a commodity-based economy make Brazil a long-term BUY.
CurrencyShares Japanese Yen Trust (FXY) is as technically oversold as it has been since late December. This hedge against market downturns remains a defensive BUY.
Millicom International (MICC) ended the week up slightly. The company recently opened a new office in the African country of Sierra Leone. To get an idea about what a crucial role Millicom plays in the economies of these African markets, click here. Use any pullback as an opportunity to BUY.
ArcelorMittal (MT) signed a record long-term contract with Brazil’s Vale to supply iron ore and pellets to its plants. ArcelorMittal said it was the largest contract ever signed between a steel company and an iron ore supplier. Vale will supply about 480 million tons of iron ore and pellets to ArcelorMittal plants during the next 10 years. The stock is a BUY.
Potash (POT) corrected sharply this week, dropping about 15%. An RBC Capital Markets analyst said the fertilizer maker is no longer his top pick due to its recent sharp appreciation, lowering his rating to "Outperform.” Nevertheless, RBC still expects the stock to eventually rise to $300 per share, as fertilizer prices and the Canadian company’s profits increase. New consensus earnings estimates released this morning for Potash project $9.80 EPS in 2008 and $15.17 EPS in 2009. That represents about 60% growth in earnings during the next year. Potash remains a top BUY.
Transocean, Inc. (RIG) contracted Korea’s Daewoo Shipbuilding and Marine Engineering Co. (DSME) to build another drillship. The $566 million deepwater drilling unit, scheduled for delivery by September 2010, would be Transocean’s fifth newbuild drillship order placed with DSME since 2006. When complete, the rig will be capable of drilling up to 40,000 feet in 12,000 feet of water. Transocean announces earnings next week. The stock is a BUY.
Elements Rogers International Commodity ETN (RJI) dipped slightly this week. As long as the commodities boom is intact, this diversified commodity play is a safe and steady bet. It remains a BUY.
P.S. Join my Eagle Publishing investment colleague Mark Skousen and me for FREEDOM FEST 2008, "The Trade Show for Liberty," on July 10-12, 2008, Bally’s/Paris Resort. FreedomFest will feature more than 88 speakers, 100 exhibitors, and 1,000 attendees. Guests will include John Mackey, CEO of Whole Foods Market, Congressman Ron Paul, a 2008 Republican candidate for president, Steve Moore, of The Wall Street Journal editorial board, David Boaz, vice president of Cato Institute, Robert Poole, Jr., of Reason Foundation, Jeremy Siegel, "The Wizard of Wharton," and Rick Rule, one of the country’s top money managers. Also hear Frank Holmes, Doug Casey, Larry Abraham, Ron Holland, Frank Trotter, Bert Dohmen, Keith Fitz-Gerald, Peter Zipper, John Mauldin, and many more.
