Latin Stock Investing - The Leading Emerging Markets Stock Investing Newsletter

Why the Best Brazilian, Chilean and Peruvian Stocks May Be Found in North America

Rudy Martin — Mon, 06 Feb 2012 16:34:14 +0000

Investing Update | February 6, 2012

You can enjoy salsa music even if you live in Denmark. Similarly, a company can be identified as Latin American even if its headquarters happens to be well outside the region.

In fact you can also enjoy substantial investment gains too from globally-focused stocks. Cemex, our top pick in this newsletter is up over 100% since being recommended and is a prime example of how emerging market companies can be based anywhere.

Our emerging market coverage list includes some firms domiciled in Europe, Australia, Canada and the United States whose fortunes are tied in varying degrees to the economies of Latin America. For example, consider our first pick here - a company that benefits from Brazil's role as the world's largest exporter of sugar and its huge need for fertilizer imports.

It's Bunge Ltd. (NYSE:BG), domiciled in White Plains, NY, the international agribusiness giant with sugar, bioenergy and fertilizer operations. The firm either owns or controls sugarcane plantations, mills and ethanol plants throughout Brazil. In addition, nitrogen fertilizers Bunge produces in Argentina are distributed throughout Latin America. Even though long-term earnings per share growth is estimated at 10% annually to follow up on the firm’s most recent five-year EPS compound growth of 27%, its shares have been changing hands at only a fraction more than (price/earnings ratio divided by EPS growth—with ratios less than one considered desirable) stands at less than 1.0. The shares of the $8.4 billion market cap firm have recently been priced at only 77% of book value.

For more emerging growth stock trading ideas like this one, download the attached update and ...

Happy trading!

Rudy

Cemex SAB de C.V. (NYSE:CX) +22%
Gafisa S.A.(NYSE:GFA) +15%
NII Holdings Inc.(NasdaqGS: NIHD) +12%

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Optimism Over Latam Economic Future Up; But Global Corn Crop Forecast Shrinking

Rudy Martin — Mon, 06 Feb 2012 05:41:00 +0000

Investing Update | January 30, 2012

Optimism over future conditions has not evaporated among business people in some major Latin American nations. According to a report "International Business Report 2012" by Grant Thornton International, business people in Peru, Brazil and Chile harbor high degrees of optimism for the future. The firm's survey of Peru business people found that with a net 78% (those who responded as optimistic minus those who said they were pessimistic) were optimistic about the business outlook.

That tied with the nation of Georgia with the highest scores of net optimism. The net score of 74% for business people in Brazil placed it in third place of the nations surveyed, just behind Georgia and Peru. With a net 52% of business people surveyed classified as optimistic, Chile—with the eighth most enthusiastic business people in the world--made the list of the world's top 10 nations as measured by net optimism of its business populace.

Count me as an optimist!

Just after President Obama (following years of delays) finally signed free-trade agreements with Mexico and Colombia, I added a position in the Global X InterBolsa FTSE Colombia20 ETF (NYSE:GXG) in order to provide LSI subscribers with the opportunity to widely benefit from the additional economic growth that Colombia would achieve from the pact.

In the past, the LSI Model ETF Portfolio, in addition to containing conventional Latin American exchange traded funds, included positions in some funds to provide hedges to protect investments in our other model portfolios. These occasionally included long and short ETFs covering commodities produced by Latin American countries and even currency ETFs to hedge against monetary fluctuations that might have negatively impacted returns to U.S. investors.

The only commodity I'm currently thinking has a chance of providing major excess returns is corn. It's headed for the biggest gain in five weeks as weather conditions in South America endanger corn and bean crops.

For more ETF trading ideas read the attached update and ...

Happy trading!

Rudy

Empresas ICA S.A.B. de C.V. (NYSE:ICA) +15%
Compania de Minas Buenaventura S.A. (NYSE:BVN) +14%
Braskem (NYSE:BAK) +11%

Emerging Market ETFs With Growth Potential

Rudy Martin — Mon, 06 Feb 2012 05:02:51 +0000

Trading Alert | January 24, 2012

Here's a quick note to highlight which emerging market ETFs stand the greatest chance of upside.

In this issue I have increased the stock market exposure of the Latin Stock Investing Model Exchange Traded Funds Portfolio to provide broad coverage of Latin America's most promising markets.

Best wishes and happy trading!

+ Rudy Martin

Guess Which Stock Markets Are Roaring

Rudy Martin — Mon, 06 Feb 2012 04:39:33 +0000

Investing Update | January 23, 2012

Following a decidedly lackluster year in 2011, Latin American market indices, individual stocks and even the region's currencies jumped out the 2012 starting gate with a vengeance.

As for the U.S.-registered stocks covered by our Stock Investing Newsletter, 91.3% were in positive territory after the first three weeks of 2012 trading. If someone considers an annual gain of 20% a good year, then 10.1% of our coverage made it within the year's first 13 trading sessions. And with respective gains of at least 10%, more than half the list has reached the midpoint of the 20% 'good year' threshold by the end of the third week of this still-youthful year.

Read more about these stocks and why they are relatively more attractive now in the attached update and ...

Happy trading!

Rudy

Cemex SAB de C.V. (NYSE:CX) +14%
Braskem (NYSE:BAK) +13%
Banco Macro SA (NYSE:BMA) +12%

Enhance Total Returns by Diversifying and Rebalancing Positions

Rudy Martin — Mon, 06 Feb 2012 04:07:15 +0000

Investing Update | January 16, 2012

For a second consecutive week, uncertainty as to whether Europe can dig itself out of its financial hole combined with increasing confidence that Latin American central bankers can fine tune the area's economies let currency traders to accumulate positions in the region's currencies.

The Brazilian real jumped 3.34% relative to the U.S. dollar during the week ended Jan. 13, resulting in a 4.60% gain for the year to date. The Chilean peso advance 2.15% versus the greenback for a 3.95% year-to-date premium while a 1.96% gain by Colombia's peso left it 5.26% ahead of the buck so far in 2012. The Mexican peso added 0.96% for a year-to-date gain of 2.56%.

However, the region's stock market indices performed in a generally ho-hum fashion. While Brazil's Sao Paulo Bovespa Index moved ahead 0.9% for the week to leave it with a year-to-date surplus of 4.2%, Chile's Santiago IPSA edged only 0.1% higher, leaving it 0.7% above its 2011 close. Less fortunate, Mexico's Bolsa gauge eased 0.7% for the week, leaving it with a 1.4% deficit so far in 2012. Argentina's Merval index surrendered 0.6% during the week, but a big jump in the year's early sessions has it up 11.8% for the year to date.

Read more about these stocks and why they are attractive in the attached update and ...

Happy trading!

Rudy

PetroBras (NYSE:PBR)
Net Servicos de Comunicacao SA (NYSE:NETC)

How to Profit from Colombia's Oil Developments

Rudy Martin — Sun, 05 Feb 2012 13:34:42 +0000

Investing Update | January 13, 2012

This is one of a series of backissue updates to the Stock Investing Newsletter service. In the last four weeks we've published 9 items on this service.

If you have not received the alerts for these, please login to the site and download them from there. I will be updating the site tonight to be sure these are all on there in the morning.

These two stocks should already be in your portfolio if you do not own them already.

Petroleo Brasileiro S.A. (NYSE:PBR) is the dominant energy company in Latin America. While being based in Brazil it has operations in various parts of the world including Africa, The Gulf of Mexico and the all-important pre-salt fields in Brazil's deep water basins.

OGX Petroleo e Gas Participacoes S.A. (OGXPY.PK) engages in the exploration and production of oil and gas properties primarily in Brazil. Its portfolio comprises 29 exploratory blocks in Brazil and 5 exploratory blocks in Colombia

Read more about these stocks and why they are attractive in the attached update and ...

Happy trading!

Rudy

PetroBras (NYSE:PBR)
OGX Petroleo e Gas Participacoes S.A(OGXPY.PK)

Most Latin American Central Banks Likely to Trim Rates in 2012 to Fight Slowdowns

Rudy Martin — Wed, 25 Jan 2012 19:21:43 +0000

Investing Update | January 9, 2012

Emerging market governments will trim rates to maintain their high growth rates and fight economic slowdowns.

But for every rule there's an exception and in this case it's Colombia.

The Andean nation's monetary authority has kept rates steady since December following a trend among central banks in Latin America to hold or cut rates on concerns Europe's debt crisis will slow global growth and harm domestic economies.

Once seen as a failing state among emerging markets, Colombia has turned itself around by improving internal security and reducing fiscal deficits. Last year it received three investment-grade credit ratings from Wall Street rating agencies. Now it's Latin America's No. 4 economy, posting economic growth of around 5 percent to 6 percent in 2012 from about 6 percent in 2011.

In this context, Colombia's central bank remains one of the few in the world still weighing rate increases along with India which is likely to change course as it's industrial production declines.

Realistically speaking, in addition to lower rates it will also take 1) a resumption of healthy, sustainable economic growth in the United States, 2) a pickup in demand and worldwide prices for raw materials and 3) some sort of resolution of Europe´s financial woes for emerging market economies and stock markets to resume the remarkable growth they have enjoyed in recent years.

Read more in the attached weekly update and ...

the top performing stocks during the week included GGAL, BMA, TEO, PZE and GGB.

Happy trading this week!

Rudy

Ecopetrol (NYSE:EC)

How to Invest in Stocks for 2012

Rudy Martin — Tue, 10 Jan 2012 13:28:21 +0000

Investing Update | January 2, 2012

Latin America could be a stock picker's paradise in 2012 - especially for dividend and value investors. It could make a real difference in your retirement or investment plans.

Why do I say that?

For most investors, the year 2011 can best be described as generally a disaster for Latin American stock markets. The region’s major stock market indices collapsed into bear markets in the second half of the year and ended well short of their respective 2010 closing values. The indices ended the year with losses ranging from 3.8% for Mexico to a painful 30.1% for Argentina.

And poor equity market returns may not be the only issue keeping investors on the sidelines as I mentioned last week. So blind, unbridled optimism is not appropriate for the region or equities markets as the year 2012 makes its debut.

But take a longer term view.

Even the disastrous year that just ended wasn’t enough to erase prior gains that have rewarded longer-term investors in Latin America with compound annual percentage gains comfortably in the double digits over the past three years.

For example, our own LSI Growth portfolio surged 95% and the LSI Dividend portfolio doubled to $200,004 since inception in October of 2008. In the same period the S&P 500 gained 38% which means our stock portfolios grew 3 times faster than the U.S. market during the last three years. That's a real, documented difference!

And while the 2011 results were flat, the LSI stock model portfolios again insulated investors from the double-digit percentage setbacks suffered by the major Latin American stock market indices. The Growth portfolio ended the year with a total-return of 3.91%, beating a similarly computed return of 2.09% for the S&P 500. The Dividend portfolio stayed in positive territory for most of 2011 and then pulled back on profit-taking to end with 1.24% lower for the year.

But investing in general ETFs has not been so profitable. Our ETF model portfolio declined by 29%, only slightly better than the negative 30% market return of Argentina’s Merval index. Great trades on sugar (+29%) and Peru (+37%) were offset by poorly-timed trades on oil (-27%) and silver (-14%). The last two were aggravated by the use of the Ultra, leveraged fund versions which work well in a momentum market - but this is no longer a momentum market where you can ride the funds to great results.

I wish I could say just go slow and steady with your picks and avoid leverage to get the greatest returns. But, as I've been saying, don’t expect the new year to any less challenging than the one just (thankfully!!!) ended. So be sure to check regularly for changes in stocks selected and allocations of the model portfolios.

Read more in the attached weekly update and ...

Happy trading this week!

Rudy

10 Reasons to Invest in Latin America in 2012

Rudy Martin — Mon, 09 Jan 2012 19:56:46 +0000

Weekly Update | December 26, 2011

Investing has been described as a game with constantly changing rules that the players are never made fully aware of. Indications are that 2012 will likely produce particularly onerous twists and turns for investors. Here are 10 factors that I believe will weigh heavily on investments in Latin America over the next 12 months.

Read more in the attached weekly update and ...

Happy trading!

Rudy

Fibria (NYSE:FBR) +10.8%
Net Servicos de Comunicacao SA (NYSE:NETC) +10.5%
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) +9.1%
Tele Norte Leste Participacoes S.A. (NYSE:TNE) +8.6%
Banco Santander Brasil SA (NYSE:BSBR) +8.6%
Data date: 12/23/11

Top Stocks to Buy as U.S. Fed Takes No Action

Rudy Martin — Mon, 19 Dec 2011 22:23:48 +0000

Weekly Update | December 21, 2011

Latin American securities markets last week responded to the emerging indications of global growth. It seems reports of the death of the U.S. economic recovery might be premature.

The average U.S.-listed Latin American stock tracked by this service has rebounded 18.8% from its bear market low as of Dec. 16, with half of them posting 15% or more increases in a short period.

My favorite turnaround stock, top rebounder Cemex SAB de CV (NYSE:CX) survived a perfect storm of negativity that included liquidity issues related to corporate debt and worries about a double dip in the U.S. economy. The Mexican-domiciled firm, which dominates the cement business in the Western Hemisphere, outlasted the worries and boomed back to a 121.59% recovery from an early-October trough of $2.27. But despite its initial bounce, I think there could still be a lot of profit potential left in Cemex shares. The price would have to more than double from its most recent close of $5.03 just to match its 2011 high of $10.72. And a return to the $40 level that it approached during more prosperous times in 2007 would mean an eight-fold price advance.

Read more about this stock in the attached weekly update and ...

other stock movers last week included : BVN, HXM, CRESY, KOF, and CCU.

Enjoy this short pre-Holiday week!

Rudy