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Still More Profits… And a Brand New Stock
The ADR Alert
Monday, October 11, 2004
By Alexander Green, Investment Director
Email – #33
** Still More Profits… And a Brand New Stock
Our international stocks are kicking into high gear.
Even though the EAFE International Index is up just 4.9% year to date, we’re sitting on double-digit gains in Banco Bilbao (NYSE: BBV), Fuji Photo (Nasdaq: FUJIY), PetroKazakhstan (NYSE: PKZ), Tenaris (NYSE: TN), and Yanzhou Coal (NYSE: YZC).
Let’s tighten up a few of our stops to protect these profits.
Move your sell stop on Banco Bilbao up to $14. Move your sell stop on Fuji Photo up to $33. Move your sell stop on PetroKazakhstan up to $35. And move your sell stop on Tenaris (NYSE: TS) up to $45.
Today we have a new recommendation as well, South Africa’s Sasol Ltd (NYSE: SSL).
Based in Johannesburg, Sasol is a $12 billion manufacturer of over 200 fuel and chemical products that it sells in more than 90 countries. It also operates coal mines and runs an integrated oil and gas group.
At first glance, Sasol might look like an unexciting investment. For the fiscal year ended in June, net income fell 24% on a 7% drop in revenues. But look closer. Things are getting substantially better at Sasol. And earnings should be sharply higher over the next several months.
Here’s why. As an exporter, Sasol was hurt by a stronger rand last year. But the South African currency is notoriously weak and is unlikely to trend higher.
From an operational perspective, Sasol’s businesses are doing well, hitting several production records. And Sasol is also a beneficiary of higher oil prices, something to keep in mind with crude near $53 a barrel.
The South African firm is also using new proprietary technology for the commercial production of synfuels and chemicals from low-grade coal. Soon it will begin applying this technology to convert natural gas to diesel and chemicals, boosting future growth even more.
And like our other international stocks, Sasol is very cheap. I estimate that Sasol is selling for less than 10 times projected earnings for the year ahead. (The company’s 3.56% dividend isn’t hard to swallow either.)
**Action to Take***
Buy Sasol (NYSE: SSL) at $20.25 or better. And place a sell stop at $17 for protection. There are no options on this one for speculators to consider.
If you have any questions, feel free to call one of our VIP Trading Services representatives at 888.570.9830 (toll-free) or e-mail: viptrader@oxfordclub.com, or contact Pillar One Advisor Greg Galloway at 800.438.3040 or 407.667.4729.
All International Trader Alert recommendations will be posted on The Oxford Club’s website. Simply go to http://www.oxfordclub.com and click on “International Trader Alert.”
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Stock: Sasol Ltd. (NYSE: SSL)
Country: South Africa
Current Price: New
Comment: Buy at $20.25 or better. Place a sell stop at $17.
Stock: Lan Airlines (NYSE: LFL)
Country: Chile
Current Price: $23.02
Comment: Buy. Sell stop is $19.50.
Stock: Tenaris (NYSE: TS)
Country: Luxembourg
Current Price: $46.71
Comment: Buy. Move sell stop up to $45.
Stock: Tel. De Sao Paulo (NYSE: TSP)
Country: Brazil
Current Price: $17.90
Comment: Buy. Sell stop is $15.
Stock: Novo Nordisk (NYSE: NVO)
Country: Denmark
Current Price: $52.64
Comment: Buy. Sell stop is $50.
Stock: Yanzhou Coal (NYSE: YZC)
Country: China
Current Price: $68.60
Comment: Buy. Sell stop is $65.
Stock: Banco Bilbao (NYSE: BBV)
Country: Argentina
Current Price: $14.53
Comment: Buy. Move sell stop up to $14.
Stock: Fuji Photo (Nasdaq: FUJIY)
Country: Japan
Current Price: $34.43
Comment: Buy. Move sell stop up to $33.
Stock: PetroKazakhstan (NYSE: PKZ)
Country: Canada
Current Price: $37.38
Comment: Buy. Move sell stop up to $35.00.
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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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Copyright – 2004 The Oxford Club, LLC. The Oxford Club does not act as an investment advisor or advocate the purchase or sale of any security or investment. The Oxford Club expressly forbids its writers from having a financial interest in any security recommended to its readers. All of our employees and agents must wait 24 hours after an Internet publication prior to following an initial recommendation. And for hard-copy-only publications, 72 hours after the publication is mailed. Investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Oxford Club provides its members with unique opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department and editors who contribute to The Club’s recommendations are proud of the reputation The Oxford Club has built since its inception in 1984. We believe the advice presented to its members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recommendations and analysis presented to members is for the exclusive use of members. Copying or disseminating any information published by The Oxford Club, electronic or otherwise is strictly prohibited. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time.
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