VIP — A “Very Important Player” in Russia

And Vimpelcom (VIP), one of Russia’s two leading cell phone companies and this week’s Global Bull Market Alert pick, is the best bet on the rapidly expanding and sometimes surprisingly affluent Russian middle class.

Russia already is the #3 market in the world, in terms of number of cell phone subscribers — just after China and the U.S. And Vimpelcom’s cellular license portfolio covers not only 78 regions in Russia with a population of 136 million but also Kazakhstan, Ukraine, Tajikistan, Uzbekistan, Georgia and Armenia. The Ukraine alone has the population of California and Florida combined. Vimpelcom’s combined licenses cover a population of about 240 million — about 80% of the size of the entire U.S. Vimpelcom Chief Executive Alexander Izosimov is particularly bullish on Kazakhstan and he thinks that its oil boom will make it the next Kuwait or Dubai. Vimpelcom is already #2 in this rapidly developing market.

Vimpelcom itself is on a roll. It has gone from being the "Avis" of the Russian market to breathing down the neck of market leader MTS. Today, both companies have 50 million subscribers. But Vimpelcom is far more efficient, operating with half as many employees. And while MTS is losing market share, Vimpelcom is now #1 in terms of absolute profit and is seeing 40% annual increases in revenue. Vimpelcom is also one of the few Russian companies that meet the strict disclosure requirements to be listed on the New York Stock Exchange and the company recently celebrated its first decade on the Big Board.

Like many other Global Bull Markets, the Russian market is highly seasonal. The bulk of the returns are generated in the fourth quarter and first quarter of each year. And globally, the telecom sector has been on fire. Some of the best-performing stocks in our current portfolio — Telefonica (TEF), Millicom (MICC) and America Movil (AMX) are in this sector.

So buy Vimpelcom (VIP) today at market and place your stop at $62.90. For even bigger potential short-term gains, buy the April $70 call options (VIQDN.X). But be aware that with Vimpelcom announcing earnings on Thursday of this week, there may be some volatility in the stock.

PORTFOLIO UPDATE

To make room for Vimpelcom, close your remaining half position in Panama-based airline Copa Holdings (CPA) to lock in a 25.65% gain. Sell your remaining options in both Millicom (MICC) and Telefonica for 365% and 316% gains, respectively.

With double-digit percentage gains in all but one of our eight positions, let’s tighten our stops further to lock in gains in case of any market hiccup. Tighten your stop in Millicom (MICC) to $53.80 and China Life (LFC) to $92.35. Also, move your stops in America Movil (AMX) to $41.85; Telefonica (TEF) to $59.30 and Philippine Long Distance (PHI) to $47.70.