Our Global Stock Investor portfolio spent the last week consolidating its recent gains, as most of our positions pulled back from record highs hit late last week. Two picks in particular — the Swedish ETF iShares MSCI Sweden Index (EWD) and India’s ICICI Bank (IBN) — were hit by short-term news that caused them to pull back sharply. These occasions offer terrific buying opportunities and it’s a good time to add to your positions in both of these picks here. Two of our picks — America Movil (AMX) and Millicom International (MICC) will be announcing earnings between now and next week. Overall, after a week or two of consolidation, I expect global markets to resume their strong Q4 run.
Otherwise, look for the November issue of Global Stock Investor in your mailbox next week to read about our latest, exciting global stock recommendation.
PORTFOLIO UPDATE
Anglo American (AAUK) was given an ‘outperform’ rating by investment bank Credit Suisse. Strong sales in copper, iron ore, coal and petroleum have prompted rival BHP Billiton to lift second-half 2007 guidance above analysts’ views, thanks to strong demand from China. Anglo American may do the same. The stock remains a BUY.
ABB Ltd.‘s (ABB) long-term issuer default and senior unsecured ratings were affirmed by Fitch at ‘BBB+’. The rating agency said ABB’s financial metrics continued to improve in 2007 and are now considered strong for the rating. Look for ABB to make acquisitions in the near future. ABB is a BUY.
America Movil (AMX) said it would report results on Oct. 18, earlier than originally scheduled. UBS analysts raised the target price at which they expect America Movil shares to trade and added the stock to their list of top 40 global recommendations. America Movil is a BUY.
iShares MSCI Sweden Index ETF (EWD) took a hit yesterday as Ericsson, the telecoms equipment giant announced a 36% drop in third quarter operating earnings. But the market ignored the good news from SKF, the world’s biggest bearing maker and a bellwether for the manufacturing sector, which gave an upbeat assessment of its outlook. SKF announced that it expected demand in all divisions to rise in the fourth quarter. That is a better indicator of underlying conditions in Sweden. Sweden remains a BUY.
iShares MSCI Brazil Index ETF (EWZ) hit a record and the country’s currency surged to a seven-year high early last Thursday, lifted by gains in global financial markets and a steady inflow of dollars to Latin America’s largest economy. Since then, the market has pulled back a bit to offer a perfect opportunity to add to your positions. BUY Brazil.
Currency Shares Japanese Yen Trust (FXY) gained against the U.S. currency in this week’s consolidation. It remains a defensive BUY.
ICICI Bank (IBN) fell yesterday and Indian stocks nose-dived Wednesday morning after India’s securities regulator proposed closing off an avenue through which overseas investors have been buying Indian shares and bonds. The Bombay Stock Exchange’s benchmark Sensex index plunged 9.2% to 17,307.90 to trigger a market circuit breaker that required an hour’s halt to trading. Indian Finance Minister P. Chidambaram sought to calm the markets by saying foreign investors were "welcome to invest in India, but for the present it is important to moderate these capital flows." Following the resumption of trading, the markets recovered some of their losses and the stock is already on the road to recovery. The market had hit a record high on Monday to close above 19,000 for the first time. This is a classic "non-event" and a buying opportunity. "India’s Citibank" is a BUY.
Millicom International (MICC) will announce its financial results for Q3 of 2007 next Tuesday, Oct. 23. Millicom is a BUY.
ArcelorMittal (MT) bought 90% of Chinese steel wire company Rongcheng Chengshan Steelcord. The Shandong-based business, which was privately owned, specializes in steel cord wire and bead wire used for reinforcing vehicle tires. ArcelorMittal said the purchase was a sign of its commitment to the broader Chinese steel market. ArcelorMittal already has a 33% stake in Chinese specialty steelmaker Hunan Valin Steel Tube & Wire Co. and is reportedly in talks with Kunming Iron & Steel Co., the biggest steelmaker in the southwestern province of Yunnan. The stock is a BUY.
Tesco (TSCDY) outperformed the U.K. market with 6% growth and lifted its grocery business market share to 31.8% — its highest ever — from 31.4% in the period a year ago. It was also named retailer of the year in the Czech Republic. The stock is a BUY.
P.S. Interested in discovering the next sector set to blast off? How about learning the specific shares the experts see as the most profitable in 2008? Attend The World Money Show London and hear from 50+ investment experts as they reveal their profitable strategies and provide their specific stock picks. The World Money Show London is being held Nov. 30 – Dec. 1 at The Queen Elizabeth II Conference Centre. The event will feature 14 panel presentations and leading investment product and service providers. As a bonus, I will be moderating a panel discussion about investment opportunities in India. Call today to register for The World Money Show London at 00 800 1414 8888 (free international phone number) between 10:30 a.m. – 10:30 p.m. (EXCEPT from Oct. 28 – Nov. 4 when the hours will be 9:30 a.m. – 9:30 p.m. because of daylight saving time). Don’t forget to mention priority code #009516. Or visit us on the web.
