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Yanzhou Completes a Share Offering
The ADR Alert
Wednesday July 14, 2004
By Alexander Green, Investment Director
Email – #20
** Yanzhou Completes a Share Offering
We only just added Yanzhou Coal Mining (NYSE: YZC) to our portfolio last week, but our shares have backed off a bit.
The reason is that Yanzhou just raised $21.5 million by issuing new shares. (The issue was two times oversubscribed.) The proceeds will go to fund the purchase of two coal mines and a methanol plant.
This is positive for the company because it allows it to fuel new growth, rather than just ride the surge in coal prices.
Bear in mind that Yanzhou is a crucial link in China’s industrialization. The company produces more than 40 million metric tons of coal per year and has proven and probable reserves of more than 2 billion metric tons.
In addition to producing thermal coal for generating electricity and coking coal for metal production, Yanzhou owns major rail transport assets as well.
In short, use the pullback to reduce your average cost.
Elsewhere in our portfolio, Banco Bilbao (NYSE: BBV) made the front page of The Wall Street Journal last week.
The Spanish banking giant, with $374.9 billion in assets, just bought Valley Bank in southern California. According to BBV Chairman Francisco Gonzalez, this is the company’s first step in capturing a segment of the U.S. Hispanic market.
Already BBV controls Grupo Financiero BBV-Bancomer, Mexico’s biggest bank. It is the biggest player handling the money Mexicans send home to their families, with a 40% market share.
Banco Bilbao remains an attractive buy.
Diageo (NYSE: DEO), one of the world’s leading spirits companies, was also in the news this week. The stock came under some selling pressure when the company announced currency exchange rates would dampen earnings in the current quarter.
On the brighter side, management insists the company should still hit its numbers for the second half. Diageo remains a buy.
If you have any questions, feel free to call one of our VIP Trading Services representatives at 888.570.9830 (toll-free) or 410.223.2679 (e-mail: viptrader@oxfordclub.com), or contact Pillar One Advisor Greg Galloway at 800.438.3040 or 407.667.4729.
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Stock: Yanzhou Coal (NYSE: YZC)
Country: China
Current Price: $55.70
Comment: Buy. Sell stop is $45.
Stock: Smith & Nephew (NYSE: SNN)
Country: Britain
Current Price: $56.14
Comment: Buy. Sell stop is $45.
Stock: Banco Bilbao (NYSE: BBV)
Country: Argentina
Current Price: $13.52
Comment: Buy. Sell stop is $10.75.
Stock: Fuji Photo (Nasdaq: FUJIY)
Country: Japan
Current Price: $30.85
Comment: Buy. Sell stop is $25.
Stock: Diageo (NYSE: DEO)
Country: Britain
Current Price: $52.44
Comment: Buy. Sell stop is $42.
Stock: PetroKazakhstan (NYSE: PKZ)
Country: Canada
Current Price: $27.90
Comment: Buy. Sell stop is $24.
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Bio:
Alexander Green is the Investment Director of The Oxford
Club. A Wall Street veteran, he has over 16 years
experience as a research analyst, investment advisor, and
professional portfolio manager. Mr. Green is also
considered one of the most talented financial writers in
the business. He’s been featured on “The O’Reilly Factor,”
profiled by Forbes and Marketwatch.com, and has written for
Louis Rukeyser and several other leading financial
publications. He currently writes and directs The Oxford
Club Communiqué, the Oxford Insight e-letter, and four
elite trading services: one focused on momentum stocks,
another focused on companies with significant insider
buying, another dedicated to international growth stocks
and another focused on short-selling fundamentally flawed
companies. Mr. Green is also a top-rated speaker at
financial conferences around the country.
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