Best ADRs to pick up – Part II

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When an investor is looking for long-term invest opportunities, he/she may have to look beyond the usual popular stocks. In this post, I will discuss two stocks from Peru and Colombia that have great runs in the past.

1. CreditCorp Ltd. – Peru – BAP

Photo: Machu Picchu, Peru

This holding company provides financial services in Peru.The corporate website says:
“It primarily operates via its four principal subsidiaries:

* Banco de Credito del Peru (BCP)
* Atlantic Security Holding Corporation (ASHC)
* El Pacífico-Peruano Suiza Compañía de Seguros y Reaseguros (PPS)
* Grupo Credito

Credicorp is engaged principally in commercial banking (including trade finance, corporate finance and leasing services), insurance (including commercial property, transportation and marine hull, automobile, life, health and pension fund underwriting insurance) and investment banking (including brokerage services, asset management, trust, custody and securitization services, trading and investment). BCP is the Company’s primary subsidiary; as of the period ended December 31, 2005, it contributed 97.0% of Credicorp’s total revenues. ”

As of December 31, 2006, (BAP) operated 339 branches. Credicorp was founded in 1889 and is headquartered in Lima, Peru.

Investment Factoid:
A $10,000 invested in this on Jan 2, 2003 would have to grown to $78,676 today.That is a return on investment of 686%.

On Feb 7th, the company announced that the net income for 4th qtr, wentup by 49% to $94M.

http://biz.yahoo.com/ap/080207/peru_credicorp.html?.v=1

2. BanColombia SA – Colombia (CIB)

BanColombia is the largest bank in Colombia and one of the largest in Latin America. The company was founded in 1875 with headquarters in Medellin, Colombia. Yahoo finance says: “As of December 31, 2006, Bancolombia operated 701 branch offices and 1,330 ATMs operating in 162 cities in Colombia. The company was founded in 1945 under the name Banco Industrial Colombiano S.A.”

CIB has increased dividends for the past years and has a yield of 2.79%

Motley fool wrote about CIB this week. The article “The World’s Best Dividend Stocks” says that in the past 5 years CIB stock went up an astounding 1,220%.

You can read that article here:

http://www.fool.com/investing/dividends-income/2008/02/22/the-worlds-best-dividend-stocks.aspx

Explore some Frontier Markets !!!!!

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There are many countries in the world whose stocks do not trade in the US exchanges. Some of these countries have domestic stock markets and have given investors great returns who dared to invest in them. Many of these are in Africa, Middle East and in Asia.

Some of the frontier markets can be explored by investing in closed-end funds that invest directly in the domestic markets of those countries. A few of those funds are discussed below:

1. Indonesia Fund – IF
This fund has an asset base of $88M and an yield of 0.35%. The 5 year return was 46% and in the year 2006 the fund returned 104%. Portfolio has heavy financial exposure.

2.Thai Capital Fund – TF
The 5 year return was 26% and last year returned 23%. Has an expense of 2.45%.Currently trading at 10.56% discount to the NAV.

3. Thai Fund – TTF
Trading at a discount of just over 9%.Has a 5 year return rate of over 24% and an expense ratio of 1.74%.

4. Turkish Investment Fund – TKF
Has a yield of 1.79% and last year it returned 31.50%

ADR stocks for a bear market !!

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During bear markets like the current one, stocks in the slow-growth, unattractive sectors like food, consumer staples, utility, forestry, paper etc. will give the much-needed stability in a portfolio. When the market crashes some 400 or 500 points some of these stocks may be green in a sea of read all over. These stocks acts a counter weight to the portfolio – kinda of like an anchor for a ship.

In this first article, I am listing some forestry and paper ADR stocks:

1. Aracruz Celulose – Brazil – ARA

2. Sappi – South Africa – SPP

3. Stora Enso Oyj – Finland – SEO

4. UPM-Kymmene – Finland – UPM

5. Votorantim Celulose e Papel – Brazil – VCP

Do your own research before investing. In future posts, I will add some more stocks that may help one to survive in this vicious bear market.

Norway ADRs!!

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There are a few ADRs from Norway that trade in the US markets.

The following are some of them:

1.StatoilHydro ASA – STO
STO was created by the merger of Statoil & Norsk Hydro a few years back. STO has yield of 2.28% and 2.1B shares outstanding with a market of $62B. PE ratio is about 8.21. In the past 52 weeks the stock was up 13%.S&P; has a 5 star rating on STO.

2. Yara International – YARIY
This stock has a yield of 0.72%. It is up over 151% since 2007 due to the explosive growth in the Agriculture/Fertilizer sector.

3. Acergy – ACGY
ACGY has market cap of $4B and a yield of about 0.96%.

Say Hello to Small Caps (Global) !!!!

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International small cap stocks or funds are growing in popularity as folks look for diversification in their portfolio. Most foreign small caps stocks are not listed in the US. So the best option to get some small cap exposure is to pick up an etf or a mutual fund.

Listed below are some of the small cap ETFs that are worth looking into:

1. WisdomTree Europe Small Cap Dividend Fund – DFE

2. WisdomTree Emerging Markets SmallCap Dividend Fund – DGS

3.SPDR S&P; International Small Cap ETF – GWX

4.iShares FTSE Developed Small Cap ex-North America Index Fund – IFSM

5.PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio – PDN