Indiana Jones Revisited

Here’s a short refresher on the Millicom story. After ordering a strategic review of its business in January, Millicom put itself up for sale, entering into talks with half a dozen emerging-markets telecom players. It looked like China Mobile would emerge as the winner, but the deal fell through in early July when both parties got cold feet. The stock then dropped to $33. At the time, we were stopped out at a loss on the stock.

There’s been nothing but good news from Millicom ever since. At the end of July, the company announced that its revenues grew overall by 54%-78% in Central America alone — during the first half of 2006. EBITDA margins also improved by 53%. The first six months of this year also marked the first time that the company turned a profit.

Add to this upswing an eye-popping 64% increase in total subscribers to 10.9 million, and you can see why management had good reason to step away from the China Mobile deal. Millicom’s strong results only have increased the stock’s perceived value and the ultimate take of shareholders. Don’t be surprised if Millicom attracts a fresh bevy of suitors before the end of autumn. With global markets entering into a traditionally strong period, it’s a terrific time to bet on Millicom’s future.

So buy Millicom (MICC) at market today and place your sell stop at $33.75. For potentially quick double-digit percentage profits, buy the January $45 calls (CQDAI.X).

PORTFOLIO UPDATE

With a handful of our recommendations boasting double-digit percentage profits and global markets showing five straight days of gains, it’s time to take profits on certain holdings.

Acergy (ACGY) is up over 19% since July 24th for an annualized gain of 866%. Sell half of your remaining stock, and take your 88% profits on your remaining options. Tighten your stop to $16.25.

Cognizant Technologies (CTSH) is up 11.5% since early June. Sell your remaining options for just under a 60% gain. With our target price of $78, hold on to your stock, but tighten your stop to $64.50.

Mitsubishi UFJ (MTU) also is showing double-digit percentage gains of more than 11%. Sell half your November $12.50 call options to lock in a 40% gain.

Astra Zeneca (AZN) also has been a solid performer, with the stock up more than 5%. Take profits on all your October $60 call options for a 40% gain.

BHP Billiton (BHP) will announce what I expect to be strong results on Wednesday of this week. It’s also expected to announce a $3 billion share buyback. The combination of events should help to propel the stock upward.

We were stopped out of Northern European Oil Royalty Trust (NRT) last week, with a 5.4% gain over three short weeks.