Your Global Stock Investor portfolio had a mixed week. Potash (POT) had a strong run, hitting near record highs, and now is up 93.04% since October. ArcelorMittal (MT) received an upgrade, as did iShares MSCI Brazil Index (EWZ), while the weakening oil and commodities prices hit Sasol (SSL), Transocean (RIG) and the Elements Rogers International Commodity ETN (RJI). Look for your dividend payment from Millicom international (MICC) on June 9. All of your other positions, except for Barrick Gold (ABX), remain BUYs.
Overall, four out of 10 positions in your Global Stock Investor portfolio are showing gains of at least 40%.
PORTFOLIO UPDATE
Barrick Gold (ABX) fell as gold prices slipped below the psychologically important $900-an-ounce level, before bouncing back. With gold’s current direction unclear, the stock is a HOLD.
Coca-Cola Hellenic Bottling (CCH) fell this week, even as parent company, The Coca-Cola Company, gushed about its overseas prospects. This stock currently is neglected but will soar when it returns to investors’ radar screens. The stock’s current oversold position is a terrific opportunity to BUY.
iShares MSCI Brazil Index ETF (EWZ) flirted with triple-digit stock price levels again, before falling back, even as Brazil got its second investment grade upgrade from Moody’s. With all of the press and enthusiasm about Brazil, this market may be due for a short-term correction. BUY on any dips.
CurrencyShares Japanese Yen Trust (FXY) was steady this week. This hedge against market downturns remains a defensive BUY.
Millicom International (MICC) is paying out its $2.40 dividend on June 9. The ex-dividend date was May 29, not June 2, as indicated in last week’s Hotline. Merger and takeover rumors will continue to move this stock, which now is up 52.08% since September. Use any pullback as an opportunity to BUY.
ArcelorMittal (MT) will continue to benefit from higher-priced steel, according to Deutsche bank, which raised its target price on the stock to $130 from $119 in a note to investors. That’s a 32% upside, based on its recent close. The stock is a BUY.
Potash (POT) had a big day yesterday and now is back up near record highs as German potash maker K+S sharply raised its forecast on Tuesday for 2008 core profit for the second time in three weeks, citing rising prices for fertilizers. With agricultural prices tumbling in the last few weeks, this stock will bounce around. But the long-term story remains intact, and POT remains a top BUY, especially on pullbacks.
Transocean (RIG) sold off this week as oil prices fell back from record highs. That means that RIG’s trailing P/E is near the bottom of its five-year historical range, making it a bigger bargain than ever. Argus research also increased its price target by $15 to $185, noting that the company is well-positioned to benefit from increased demand for deepwater rigs and higher oil and natural gas prices. The world’s biggest driller is now technically oversold and a BUY.
Elements Rogers International Commodity ETN (RJI) fell back as global commodities prices have eased. This is a diversifier in your portfolio and remains the safest play on the commodity boom. It is a BUY.
Sasol (SSL) fell this week as South Africa’s currency and stocks pulled back amid reports of mob violence against foreigners and angry protests over poor living conditions in South Africa. Nevertheless, recall that South Africa is the second best-performing emerging market in the world year-to-date, just behind Brazil. The country has plenty of companies that deal in natural resources and investors have benefited from the surge in commodities prices overall. Sasol also has a history of rallying sharply when the market turns. Ignore the short-term bad news and BUY the stock.
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