Betting on Good News from Ukraine

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Last week ended on a positive note for U.S. stock markets, with the S&P 500 closing above 1,900 for the first time ever and ending the week up 1.21%. The NASDAQ continued to recover, rising 2.33%. The MCSI Emerging Markets Index rose 0.47%.

Big gainers in your Bull Market Alert portfolio included The Bank of Ireland (IRE), jumping 4.49%; AbbVie Inc. (ABBV), adding 1.93%; and energy play EOG Resources, Inc. (EOG), gaining 1.43%. Both Grifols, S.A. (GRFS) and India’s Tata Motors Limited (TTM) hit new 52-week highs as well. Finally, Visa, Inc. (V) moved back above its 50-day moving average and is back to a BUY.

This week’s Bull Market Alert recommendation, Mobile Telesystems OJSC (MBT), is Russia’s largest mobile phone service provider.

Founded in 1993 and headquartered in Moscow, MBT currently serves approximately 102.4 million mobile subscribers. In addition to Russia, MBT also has been awarded GSM licenses in Ukraine, Armenia, Turkmenistan and Belarus — a region that boasts a total population of more than 200 million. MBT also was recently ranked ninth among the Top 10 leading telecommunications brands in the world.

Despite all of the achievements of MBT, this recommendation is more a bet that the Ukrainian crisis is defusing, and that the Russian market is set to continue what has already been a substantial bounce.

The news from the region has certainly improved. On Sunday, Ukrainians elected Western-oriented billionaire Petro Poroshenko as president. Importantly, President Vladimir Putin has indicated that Russia will work with him. Visa and MasterCard announced on Friday that they’ll keep operating in Russia, signaling an improving business environment. Finally, indications are that Russian troops have started to withdraw from the Ukrainian border.

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Like the rest of the Russian stock market, MBT is cheap, trading at a price-to-earnings (P/E) ratio of just over 7. No wonder it has become the favorite of many large U.S. hedge funds seeking to profit from Russia’s current crisis.

So buy Mobile Telesystems OJSC (MBT) at market today, and place your stop at $16.00. If you want to play the options, I recommend the September $19.00 calls(MBT140920C00019000).

Portfolio Update          

The Bank of Ireland (IRE) gained 4.49% last week. Bank of Ireland regained lost ground last week as it continued to trade higher along its mighty 200-day moving average (MA). Moody’s raised its credit rating for IRE last Monday by two notches, from Baa3 to Baa1, marking the second time in six months that Moody’s has upped its rating for Bank of Ireland. IRE is a HOLD.

AbbVie Inc. (ABBV) added 1.93% as it continued its six-week long bull run. Abbvie is also just 50 cents from its 52-week high. ABBV filed a new-drug submission with Health Canada last week as it is seeking to bring its latest Hepatitis C therapy to Canadian markets. ABBV is a BUY.

Grifols, S.A. (GRFS) rose 0.93% over the past five trading days. GRFS hit a new 52-week high and all-time high early last week. Trading volume spiked to a 52-week high last week as well, a bullish recovery from GRFS’ latest dip. GRFS is a BUY.

EOG Resources, Inc. (EOG) gained 1.43% last week. CNBC personality Jim Cramer highlighted the outstanding growth potential of U.S. energy companies late last week — mentioning EOG as one of his favorites. Domestic energy companies such as EOG are currently experiencing growth rates of up to 40%, making them hot stocks to own. EOG is a BUY.

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Tata Motors Limited (TTM) added 0.49% last week after hitting another new 52-week high for the second week in a row. Moody’s affirmed its positive rating for Tata Motors early last week and maintained its outlook of “stable.” TTM is a BUY.

Visa Inc. (V) rose 1.07%. Both Visa and MasterCard reached an agreement with Russian authorities recently to continue their card payment operations throughout Russia. Russian operations have been somewhat complicated recently due to Russia’s Ukrainian pursuits and the resulting sanctions. However, this agreement stabilizes Visa business dealings in this part of the world. V popped back above the 50-day MA last Friday to move to a BUY.

ProShares Ultra Real Estate ETF (URE) dipped 0.94% last week. This latest addition to your Bull Market Alert portfolio gives you a 2x leveraged bet on the positive trend in real estate. And, URE’s recent dip gives you the ideal buying point to prosper from the resurgence in the housing markets. URE is a BUY.

Nicholas Vardy

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Given AT&T’s (T) pending acquisition of cable company DirecTV (DTV), I thought today would be a good opportunity to revisit my PowerTalk with Susan Crawford from May 10, 2013.

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