First Half 2011 Performance: The Five Best and Worst ADRs

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With the first six months over for this year, lets take a quick look at the five best and worst ADR stocks. I have included stocks that are exchange-listed only and whose stock price is above $10.

The five best performing ADRs YTD:

1. Company:ATA Inc (ATAI)
YTD Change:173%
Current Price: $10.05

2. Company:Silicon Motion Technology (SIMO)
YTD Change: 152%
Current Price: $10.84

3. Company:Melco Crown Entertainment (MPEL)
YTD Change: 100%
Current Price: $12.91

4. Company:Elan (ELN)
YTD Change:98%
Current Price: $11.54

5. Company:Amarin (AMRN)
YTD Change: 76%
Current Price: $14.71

The five worst performing ADRs YTD:

1. Company:E-Commerce China Dangdang (DANG)
YTD Change: -57%
Current Price: $12.39

2. Company:HiSoft Technology International  (HSFT)
YTD Change: -51%
Current Price: $14.82

3. Company:Noah Holdings (NOAH)
YTD Change: -42%
Current Price: $11.54

4. Company: Country Style Cooking Restaurant (CCSC)
Current Price: $13.50
YTD Change:-42%

5. Company:Logitech International (LOGI)
YTD Change: -39%
Current Price: $11.27%

Except Logitech International, the rest of the worst performing ADRs noted above are Chinese firms.

Source: http://www.adrbnymellon.com

Disclosure: No Positions

Australia’s Top Merchandise Trade and Trade Partners

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The Department of Foreign Affairs and Trade of Australia released the Composition of Trade Australia 2010 report today. The following are some of the key takeaways from the report:

  • In 2010, China was the largest trade partner of Australia with total trade growing 23.6% to over A$100 billion for the first time which lead to a trade surplus of A$16.8 billion.
  • The top commodity exports to China were of iron ore and concentrates, coal  and other ores.
  • Japan remained the second largest two-way trade partner followed by USA.
  • Australia’s exports increased 13.9% to A$284.6 billion and imports rose by 5.4% to A$267.8 billion last year.
  • After China, Japan was the second largest export market for Australia followed by South Korea.

Australia’s Major Trade Partners in 2010

Click to enlarge


 

Australia’s Top 10 Merchandise Exports and Imports in 2010

Source: Composition of Trade Australia 2010

Related:

Australia’s Major Trading Partners in 2012

Related ETF:

iShares MSCI Australia Index Fund (EWA)

Disclosure: No Positions

World’s Top Five Beer Companies

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SABMiller PLC, the international beverage company, announced plans to acquire Foster’s Group(FBRWY) of Australia for A$9.51 billion ($10.06 billion). Foster’s quick rejection of this takeover bid could lead to a battle among the major beer companies. Foster’s rejected the offer saying it “significantly undervalues the company.”

Beer companies are attractive investment options when the economy is in expansion or contraction modes. During times of economic growth, consumption of beer goes up as people tend to drink more. On the other hand, during recessions consumers try to beat stress and suffering by spending on cheap items such as beer.

The graphic below shows the Global Beer Market share in 2010:

Source: The Wall Street Journal

Belgium-based Anheuser-Busch InBev NV (BUD) is the world’s largest brewer by volume and owns about 200 beer brands including Budweiser, Busch, Michelob, Bud Light, and Natural Light. In February the company announced a deal to acquire 100% equity interest in Liaoning Dalian Daxue Brewery Co., Ltd. of China to expand its market share there. Last year, BUD’s total revenue amounted to about $37.0 billion. While the revenue growth was under 1%, profit margin stood at a healthy 17% range.

SABMiller PLC (SBMRY) is the world’s second largest brewer by volume. It owns a portfolio of over 150 brands, including international beers such as Pilsner Urquell, Peroni Nastro Azzurro and Miller Genuine Draft according to Wikipedia. SABMiller is also one of the world’s largest Coca Cola(KO) bottlers with operations in 14 markets.

Dutch beer giant Heineken N.V. (HINKY) is the owner of more than 200 international, regional, local and specialty beers and ciders, including Amstel, Birra Moretti, Cruzcampo, Foster’s, Kingfisher, Newcastle Brown Ale, Ochota, Primus, Sagres, Star, Strongbow, Tiger and Zywiec and operates in more than 70 countries. In January, 2010 it acquired the beer operations of Fomento Economico Mexicano, S.A.B. de C.V (FEMSA) of Mexico. Commenting on the SABMiller’s takeover bid of Foster’s Heineken said that it is primarly interested in expansion in emerging markets.

Copenhagen, Denmark-based Carlsberg (CABGY) brews beers under the Carlsberg Beer and other local brand names. Carlsberg holds about 40% of the Russian beer market through its ownership of the Baltika Brewery, Russia’s largest beer producer.

China Resources Enterprise(CRHKY) is the subsidiary and the listed company of China Resources Holdings.It is listed on the Hong Kong Stock Exchange and is one of the constituent stocks of the Hang Seng Index. The blue-chip consumer goods conglomerate focuses on the consumer businesses including retail, beer, food and beverage in China.The group is China’s largest beer producer by sales volume and is also the country’s largest supermarket operator.

Related Articles:

  1. Top 10 Beer Brands of 2011 (Beer Universe)
  2. TOP 10 GLOBAL BEERS (The Drink Business)
  3. The global beer industry – Sell foam like soap (The Economist)
  4. The World’s Best Beers (CNBC)
  5. The World’s Five Biggest Alcohol Companies by Market Cap
  6. Are Foreign Beer Company Stocks a Good Buy Now?
  7. Alcoholic Beverage stocks trading in the NYSE
  8. The Plot to Destroy America’s Beer, Bloomberg BusinessWeek
  9. Are We in Danger of a Beer Monopoly? (The New York Times)
  10. Global Beer: The Road to Monopoly by Bernard Ascher, American Antitrust Institute (pdf)
  11. The Top 10 Brewers by Volume:

Top 10 Beer makers

Source: The Economist, Sept 20, 2014

Disclosure: No positions

Why Stocks Are Not Always The Best Asset Class For Long-Term Investment

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The conventional wisdom holds that stocks are always the best asset class for long-term investment. However that theory is not entirely true. Investing in equities at the wrong time and holding for the long-term can lead to large and painful losses.

The following three charts shows that investors holding stocks for the long-term may lose a significant portion of their capital:

Click to enlarge

Investors who held Japanese stocks at the end of 1989 have lost an astonishing 75% of their capital over the last 21 years. Similarly the MSCI World and S&P500 Indices are still down 6% and 12% below their respective early 2000 levels.

But stocks held for a very very long-term may yield better returns than other asset classes as shown in the chart below. However for most investors the investment horizon is not a hundred year or more.

Performance of stocks over other asset classes since 1802:

Click to enlarge

Sources:
The benefits of a flexible approach to asset allocation, PSG Asset Management, South Africa
Dreman Value Management

Related ETFs:
SPDR S&P 500 ETF (SPY)
iShares MSCI Japan Index Fund (EWJ)

Disclosure: No positions

Comparison of Personal Saving Rate in Germany vs. Other OECD Countries

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The personal household saving rate in Germany is one of the highest among developed countries. German households put aside a monthly average of Euro 190 per inhabitant in the first half of 2010, according to a report by De Statis.The following chart shows the comparison of personal saving rate in Germany against a select few OECD countries:

 

Source: Germans, Prizing Virtues of Saving, Find Euro Bailouts Hard to Swallow, The Wall Street Journal

From the journal article:

Germans’ deep-seated economic caution has roots in the ruinous wars and inflation of the last century. Many of today’s Germans are as frugal as ever, on average saving 11.5% of their incomes in 2010, according to the Organization for Economic Cooperation and Development. That compares with a savings rate of 5.7% in the U.S. last year.

In Ireland, one of the euro-zone countries that is getting a bailout, the average savings rate last year was 11.1%, near that of Germany—but the rate only rose after the shock of the global financial crisis, and follows years of much lower saving. Meanwhile, in Greece, residents on average spent 12% more than they earned in 2008, the latest year for which data is available from the OECD.

Despite having a high savings rate and one of the large equity markets in the world, Germans do not invest heavily in stocks. In fact, the majority of Germans put most of the money saved in bank deposits and to some extent in life insurance products.