Dialing for Dollars

The ADR Alert
Tuesday, May 2, 2006
By Alexander Green, Investment Director

Email – #109

** Dialing For Dollars

Going abroad has been profitable for us this year.

Today, for instance, our shares of Dr. Reddy’s Laboratories (NYSE: RDY) are up over 5%, hitting a new 52-week high. Raise your sell stop to $34 to protect your profits here.

And our Dr. Reddy’s September $25 calls (RDY-IE) have tripled. Sell half your remaining position to lock in some profits now. We’ll let the balance ride for potentially bigger gains down the road.

We have a double-digit gain in Tata Motors (NYSE: TTM), too. Move your sell stop up to $20 here.

And Veolia Environnement (NYSE: VE) is also hitting a new 52-week high. Move your sell stop up to $56 here.

Today, I also have a new recommendation for you: Telekom Indonesia (NYSE: TLK).

TLK offers both fixed line and wireless phone services in Indonesia. The company also sells networking services, satellite broadcasting, broadband Internet access, cable, telex and telegram services.

This is a growing business in Indonesia. TLK’s revenues are $4.45 billion over the last 12 months. Operating margins are 42%. And management is earning a hefty 35% return on equity.

The real growth is in cell phone services, where TLK controls more than half the national market. In 2004, the company saw is subscriber base expand by 87% to 16 million. Since then, Telekom has steadily increased customers, and now has over 20 million subscribers.

Telekom can look forward to a steady stream of recurring revenue. And with the company trading at less than 13 times earnings and yielding 3.2%, the stock looks attractive at current levels.                                            

***Action to Take***

Buy Telekom Indonesia (NYSE: TLK) at $36 or better. And place a sell stop at $30 for protection. Speculators may want to take a look at the October $35 calls (TLK-JG).

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 or Rick Pfiefer at 800.438.3040 or 407.667.4729.

Stock & Symbol
Country
Current Price
Comments

Telekom Indo. (NYSE: TLK)

Indonesia

NEW

Buy at $36 or better. Place a sell stop at $30.

SAP AG (NYSE: SAP)

Germany

$55.15

Buy. Sell stop at $47.

China Medical (Nasdaq: CMED)

China

$24.68

Buy. Sell stop is $22.

Veolia Environ. (NYSE: VE)

France

$60.35

Buy. Move sell stop up to $56.

Qiagen (Nasdaq: QGEN)

Netherlands

$15.14

Hold. Sell stop is $12.

Tata Motors (NYSE: TTM)

India

$21.37

Buy. Move sell stop up to $20.

Petro-Canada (NYSE: PCZ)

Canada

$49.79

Buy. Sell stop is $45.

Dr. Reddy’s (NYSE: RDY)

India

$36.93

Buy. Move sell stop up to $34.

 

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