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Whiplash In World Markets…
The ADR Alert
Tuesday, July 31, 2007
By Alexander Green, Investment Director
Email – #169
** Whiplash In World Markets…
My daughter Hannah’s favorite attraction at Disney World is Mr. Toad’s Wild Ride. It bears an uncanny resemblance to world stock markets lately.
Last week’s gyrations caused us to hit our sell stops on Ctrip.com (Nasdaq: CTRP), Elbit Systems (Nasdaq: ESLT) and Endesa (NYSE: EOC).
We took a 21% profit in Ctrip, a smaller gain in Elbit and a small loss in Endesa.
Yesterday, we hit our sell stop on AerCap (NYSE: AER). We stopped out about a buck below our entry price.
The rest of our ADR holdings are springing back nicely from the recent selloff. And there has been positive news on the fundamental side, too.
For example, India’s HDFC Bank (NYSE: HDB) just raised $698 million by selling new ADRs on the New York Stock Exchange at $92.10 each. I expect the stock to be back above that level again soon. Our shares have already rallied six points from the low they hit last Thursday.
Potash Corp. (NYSE: POT) has rebounded strongly, too. As the world’s largest fertilizer company, this stock is relatively immune to an economic slowdown. Plus, last week’s earnings release was superb. Profit jumped 63% to $285.7 million. With gross profit up strongly in every product category, Potash raised its outlook for the year ahead. Keep buying.
Gmarket (Nasdaq: GMKT) has also bounced back smartly – and is up nearly 4% today. We get results from Gmarket tomorrow. Expect good news. I’ll have a full report in my next broadcast.
The9Limited (Nasdaq: NCTY) has been less volatile than most stocks lately, despite the fact that this is a Chinese company. This signals that investors realize the stock is both fairly valued and likely to deliver a positive earnings surprise in a few weeks. I’ll keep you posted.
I know the market has rallied nicely over the last two days. But I’d be surprised if we’re out of the woods just yet. Investor psychology has been bruised.
The stocks below are well worth buying. Just expect to see more bumps in the road in the trading sessions just ahead. Keep some cash on hand to take advantage of it.
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
Country
Current Price
Comments
Gmarket (Nasdaq: GMKT)
Korea
$21.38
Buy. Sell stop is $17.
The9 Limited (Nasdaq: NCTY)
China
$49.42
Buy. Sell stop is $40.
Potash Corp. (NYSE: POT)
Canada
$82.83
Buy. Sell stop is $73.
HDFC Bank (NYSE: HDB)
India
$89.04
Buy. Sell stop is $78.
Endesa (NYSE: EOC)
Chile
Sell
Stock hit trailing stop.
Elbit Systems (Nasdaq: ESLT)
Israel
Take profits
Stock hit trailing stop.
AerCap Holdings (NYSE: AER)
Netherlands
Sell
Stock hit trailing stop.
Ctrip.com (Nasdaq: CTRP)
China
Take profits
Stock hit trailing stop.
Bi 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. Under his direction, The Oxford Club’s portfolios have beaten the Wilshire 5000 Index by a margin of more than 3-to-1. The Oxford Club Communique, whose portfolio he directs, is ranked third in the nation for risk-adjusted returns over the past five years by the independent Hulbert Financial Digest. Mr. Green has written for Louis Rukeyser and several other leading financial publications. He has been featured on “The O’Reilly Factor,” and has been profiled in Forbes, Kiplinger’s Personal Finance, and Marketwatch.com. He is also Chairman of Investment U, an internet-based research service with over 300,000 readers. He currently writes and directs the twice-weekly Oxford Insight e-letter and three elite trading services: The Momentum Alert, The Insider Alert and The ADR Alert. Mr. Green is also a top-rated speaker at financial conferences around the world.
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