After an unusually strong week for our Global Stock Investor portfolio two weeks ago, many of our stocks corrected this week. This offers new subscribers the perfect opportunity to buy our current recommendations — and existing subscribers the chance to add to their holdings.
Remember, the philosophy behind Global Stock Investor is to recommend investments based on major, top-down megatrends in global markets, such as the global cell phone revolution (AMX, MICC), the emergence of India (IBN), and the Reagan revolution in Europe (EWD). As a general rule, assuming the fundamentals of our investment thesis remains intact, you should treat short-term dips in our BUY recommendations as opportunities to add to your positions.
PORTFOLIO UPDATE
Mining group Anglo American (AAUK) announced this week that it received shareholder approval to spin off Mondi Group, its paper and packaging subsidiary. This is all part of Anglo American’s long-term restructuring plan and the consolidation of its activities around the mining sector. Our #1 play on the commodities super cycle, Anglo American remains a STRONG BUY.
Home Inns & Hotels Management (HMIN) is expanding its footprint in China. The company announced that it is buying the remaining minority interest in its Beijing unit for $22.1 million. Home Inns also announced that it is purchasing Beijing City Sunshine, a small rival chain, for an undisclosed amount. The stock remains a HOLD.
Indian banking play ICICI’s (IBN) record share offering last week was 11.5 times oversubscribed. New key investors included the government-controlled State Bank of India, global banks Citigroup and Merrill Lynch, U.S. private equity firm Warburg Pincus, and the Singaporean state-controlled investment vehicles Government of Singapore Investment Corp. (GIC) and Temasek. This oversubscription has allowed the stock to hold up in spite of a sell-off in global markets and it remains a BUY at these levels.
Global cell phone operator Millicom International (MICC) continues its relentless pace of expansion in fast-growth markets. A Millicom executive told Reuters last week that the company was investing $300 million through 2008 in Honduras with the aim of expanding the number of subscribers to 2.7 million users. The greatest future of this stock, however, still lies in Africa. It remains a STRONG BUY.
Shares in global steel giant Arcelor Mittal (MT) went on sale this past week after Merrill Lynch downgraded the stock to neutral. Global Stock Investor subscribers could not have asked for a greater gift. Here’s the reality. The company expects no slowdown in the demand for its products. Demand for auto, construction, mechanical equipment, power generation, oil and gas and the tube industry in Europe remains robust. The company is ahead of schedule in implementing $1.6 billion in merger synergies. As the world’s #1 steelmaker, Arcelor Mittal is a dominant force for many years to come. Don’t bet against the Mittal dynasty. This is one to BUY on the dips.
Tesco’s (TSCDY) expansion plans in the United States with its "Fresh & Easy" chain were featured in Britain’s Economist magazine last week. The story highlighted Warren Buffett’s 3% stake in Tesco as a significant vote of confidence in the global retailer’s future. The recent market correction offers the perfect time to buy Tesco or to add to your existing position. Tesco remains a BUY.
The Swedish ETF (EWD) held its own over the week. And this week’s pullback in America Movil (AMX) makes it a terrific time to add to your position. Both positions remain BUYs.
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