Moving Longtop to a “Hold”

Email – #251

** Moving Longtop to a “Hold”

There’s a common perception that Chinese companies are imitators, not innovators.

And while it’s true that the big city streets there are full of vendors selling fake Rolexes, pirated DVDs and imitation iPhones, this reputation is not entirely deserved.

The Chinese culture originally brought us paper, printing, gunpowder and the compass. And it is still innovating today.

One of the most conservative measures of technical innovation is the number of patents granted by the U.S. Patent & Trademark Office. From 2004 to 2007, for example, China-origin patents grew at a 27% annual rate. If current trends continue, by 2020 the number of China-origin patents granted will exceed the number of patents from Germany, Britain, France and Italy combined.

One of the top innovators in that country is our own China Mobile (NYSE: CHL). With over 450 million subscribers, the world’s largest mobile operator uses advanced TD-SCDMA, a homegrown 3G technological standard it helped develop.

Moreover, China Mobile enjoys 27% profit margins. Management is earning a healthy 28% return on equity. And we’re earning a dividend yield of 3.9% here.

I still see plenty of upside potential with China Mobile. Keep buying.

I also like the outlook for Eldorado Gold (NYSE: EGO), one of the lowest cost pure gold producers with operations in Brazil, China, Greece and Turkey.

On Monday, CEO Paul Wright reported the results of a recently completed review of the company’s Kisladag mine in Western Turkey.

It was all good. Eldorado plans to reduce operating costs by 15% and increase production by up to 40%.

Gold itself has been quiet lately. But earnings estimates for this quarter and next at Eldorado have been rising steadily over the last 30 days. We get an earnings announcement here on May 7. I expect good news. Consider picking up Eldorado while it’s still cheap.

Swiss agricultural firm Syngenta (NYSE: SYT) has been in the news lately, too.

The world population has tripled over the past 50 years. Continual innovation in agriculture is necessary to ensure food security. Without this, many thousands of acres of natural habitat will be destroyed.

Fortunately, Syngenta allows farmers to grow more food from existing resources. And at its annual meeting last week in Basel, Switzerland, CEO Mike Mack called for increased international cooperation to put the right technology in the hands of growers worldwide.

More developing nations are already signing on. And Syngenta itself will be a major beneficiary.

Lastly, our shares of Longtop Financial (NYSE: LFT) hit a new 52-week high last week – and are up 43% since we got in a few months ago. Over the last few days, however, the stock has moved closer to our protective stop at $21.

For that reason, I’m moving Longtop to a “Hold” today . If it remains above our stop – and resumes its uptrend – I’ll move it back onto our buy list.

Our other stocks remain attractive at current levels.

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 call Pillar One Advisor Rick Pfiefer at 800.438.3040 or 407.667.4729.

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Current Portfolio:

Stock: China Mobil (NYSE: CHL)
Country: China
Current Price: $43.29
Comments: Buy. Sell stop is $36.

Stock: Eldorado Gold (NYSE: EGO)
Country: Canada
Current Price: $8.27
Comments: Buy. Sell stop is $5.50.

Stock: Syngenta (NYSE: SYT)
Country: Switzerland
Current Price: $41.72
Comments: Buy. Sell stop is $32.

Stock: Compania de Minas Buenaventura (NYSE: BVN)
Country: Peru
Current Price: $21.71
Comments: Buy. Sell stop is $16.

Stock: Longtop Financial (NYSE: LFT)
Country: China
Current Price: $21.72
Comments: Hold. Sell stop is $21.

Stock: Ecopetral, SA (NYSE: EC)
Country: Columbia
Current Price: $17.84
Comments: Buy. Sell stop is $14.25