The Q4 rally I predicted continues. Our Global Stock Investor had another strong week, with several of our holdings hitting record highs on Monday. India’s ICICI Bank (IBN) had another remarkable week, notching a 13.72% gain, and Canada’s Potash (POT) found its stride, jumping 8.8%. If the Fed cuts rates today, our Global Stock Investor portfolio is off to the races for the rest of the year.
PORTFOLIO UPDATE
Anglo American (AAUK) advanced a solid 3.67% for the week. Our global commodities supercycle play remains a BUY.
ABB Ltd. (ABB) broke through the $30 level for the first time on Monday, and is up 21% since we recommended it. ABB reported an 86% jump in third-quarter net profits, to $738 million from $397 million a year earlier. Sales rose 26% to $7.19 billion from $5.68 billion. Orders jumped 33% to $8.32 billion. ABB said it saw continued strong demand for new infrastructure projects in China, India and the Middle East, where governments and companies need power-distribution equipment or industrial-processing sites. ABB is a BUY.
America Movil (AMX) was hit by news that Mexico’s monopoly watchdog will start two new investigations within three weeks into the dominance of telephone giants America Movil and Telmex, both controlled by billionaire tycoon Carlos Slim. That won’t slow America Movil as it will be looking to expand its empire by bidding for one of two new cellular phone licenses in Panama in the coming months. America Movil is a BUY.
iShares MSCI Sweden Index ETF (EWD) ended the week in exactly the same place it started. Weakness in the Swedish corporate sector means Sweden is a HOLD.
iShares MSCI Brazil Index ETF (EWZ) was up 5.92% for the week, after falling from record highs on Monday. The ETF is up a whopping 23.09% since we recommended it in mid-September. This momentum play rolls on. BUY Brazil.
Currency Shares Japanese Yen Trust (FXY) was flat over the week. As always, it is a defensive BUY.
ICICI Bank (IBN) soared another 13.72% this week. The momentum behind ICICI is extraordinary. Remember India’s largest bank is trading at about 10% of what its counterparts in China are trading. "India’s Citibank" is a BUY.
Millicom International’s (MICC) rise of 2.79% could not match its remarkable 20%+ jump in share price the previous week. For some color on Millicom’s brand building efforts in one of its key markets, Colombia, download this report here. Remember, Colombia is but one of Millicom’s markets — and it alone has a population of 42 million — making it larger than California. Millicom is a BUY.
ArcelorMittal (MT), the world’s largest steelmaker, hit a record high on Monday, but fell back in yesterday’s trading to end flat on the week. The company also said on Friday that it intended to buy a 70% stake in Carminati Distribuzione, a steel distribution firm active in the north of Italy. Finally, in what should be huge vote of confidence, ArcelorMittal also announced that it had bought back 1.39 million of its own shares during the Oct. 18-24 period. That’s about $100 million dollars worth. If the company is buying its own stock, so should you. ArcelorMittal is a BUY.
Potash Corp. (POT) soared 8.8% this week. Potash also announced that profit rose 67% in the third quarter on strong demand for fertilizer in the developing world and higher pricing due to tight supplies. Net income rose to $243.1 million, or 75 cents per share, from $145.2 million, or 46 cents per share, a year earlier. Sales climbed 36% to $1.3 billion from $954.5 million. Banc of America Securities upgraded the shares and said a major competitor, Silvinit, a Russian potash producer, may be forced to stop shipping potash when it loses a main rail line. That could lead to higher potash prices and is very bullish news for Potash. The latest addition to our Global Stock Investor portfolio is a BUY.
Tesco (TSCDY) also hit a record high this week, notching a gain of 4.01% — no doubt helped by the strengthening U.K. pound. Tesco also announced that it has raised $2 billion of debt in its first dollar-denominated bond issue as it gears up for its assault on the U.S. market with the launch of six stores in Southern California next week. BUY Tesco.
Sincerely,
Nicholas A. Vardy
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