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Wipro: A Passage to India
The ADR Alert
Wednesday, December 22, 2004
By Alexander Green, Investment Director
Email – #42
** Wipro: A Passage to India
Our current portfolio of international stocks is beating both the Dow and the S&P 500.
We have a short-term gain of 32% in Spanish banking giant Banco Balbao, for example. Move your sell stop up to $16.50 to protect your profits here.
And Chile’s Lan Airlines (NYSE: LFL) is up 33% since we got in three months ago. Move your sell stop up to $30 here.
Our Russian cell phone company Mobile Telesys (NYSE: MBT) continues to be volatile, however. There are no fundamental problems with the company or its business prospects. But the Russian government’s relentless prosecution of oil and gas giant Yukos is undermining confidence in the market there. For that reason I’m leaving MBT at a hold but raising our sell stop to $125.
And here’s a new addition to our fast-moving international stocks: Wipro Ltd. (NYSE: WIT).
Based in Bangalore, India, Wipro is a leader in global information technology. The $17 billion company primarily serves the IT and electronic commerce requirements of companies in India, the Middle East and Asia.
It’s key strength: technology outsourcing. As you may know, this has become the new global “megatrend.”
India has a large supply of qualified and inexpensive software developers, programmers, and technology managers. Wipro is helping corporations keep costs in check while maintaining a high level of quality.
Business is exceptionally strong. For the six months ended in September, revenues jumped 49%, to $862 million. Net income bolted 74% higher, to $163 million.
And there’s no reason to believe this trend will end anytime soon. Just last week, for example, Wipro signed a five-year multi-million dollar contract with TUI UK, Europe’s largest travel company, to provide infrastructure support.
Expect to see plenty of other deals like this popping up in the weeks ahead, causing analysts to raise earnings estimates higher.
***Action to Take***
Buy Wipro (NYSE: WIT) at $25 or better. And place a sell stop at $21 for protection. Speculators may want to take a look at the March $25 calls (symbol: WIT-CE). But don’t pay more than $2.
I’ll be traveling next week, so your next International Trader Alert will arrive the week after. Enjoy the holidays!
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.
Stock: Wipro (NYSE: WIT)
Country: India
Current Price: New
Comment: Buy at $25 or better. Place a sell stop at $21.
Stock: AngloGold (NYSE: AU)
Country: South Africa
Current Price: $36.64
Comment: Buy. Sell stop is $33.
Stock: China Life Ins. (NYSE: LFC)
Country: China
Current Price: $27.87
Comment: Buy. Sell stop is $26.
Stock: Mobile Telesys (NYSE: MBT)
Country: Russia
Current Price: $133.26
Comment: Hold. Move sell stop up to $125.
Stock: Sasol Ltd. (NYSE: SSL)
Country: South Africa
Current Price: $21.10
Comment: Buy. Sell stop is $17.
Stock: Lan Airlines (NYSE: LFL)
Country: Chile
Current Price: $32.30
Comment: Buy. Move sell stop up to $30.
Stock: Banco Bilbao (NYSE: BBV)
Country: Argentina
Current Price: $17.22
Comment: Buy. Move sell stop up to $16.50.
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