A Review of Two Dutch ADRs

Posted by on

The Netherlands is home to the world’s oldest stock exchange, the Amsterdam Stock Exchange. The country has the 16th largest economy in the world and The Economist magazine ranked The Netherlands as the fourth most democratic country in the world in 2008 (Source: Wikipedia). The famous tulip mania occurred during the 16th century when speculations on the tulip bulbs lead to a bubble comparable to the dot com and other bubbles in recent history. During the tulip mania, speculations in tulip bulbs reach so high that a hard-to-find color tulip flower bulb was valued higher than the value of a house.

As a former colonial power, the Dutch government always encouraged the growth of private enterprises. Following that long and famous tradition, Holland today has some of the most innovative and largest global corporations in the world such as the Royal Dutch Shell (RDS.A), Unilver(UN), Phillips Elctronics(PHG), ING Groep (ING), etc.

In this post, lets take a look at two smaller Dutch companies – Reed Elsevier NV and CNH Global.

1. Reed Elsevier NV (ENL) is the publishing industry proving information to medical, legal and other businesses.”The Company’s businesses provide products and services that are organized in four business divisions: Elsevier serves the science and medical sector; LexisNexis, the legal and other professional sectors, Reed Exhibitions, the exhibitions and conferences sector; and Reed Business Information, the trade magazines and information business sector.”Lexis Nexis the preferred research source for lawyers and university academics, students as well.Lexis Nexis charges a hefty price for annual subscriptions. They also own ChoicePoint, another consumer information provider in the US.

ENL offers an yield of 6.67% and has a market cap of about $7B. The profit margin is around 9%. Annual revenues in the past 5 years has been flat.

2.CNH Global (CNH) is a construction and agricultural machinery maker and sells its products in 170 countries around the world.As per the corporate site “One in three combine harvesters and backhoe loaders, one in four tractors and skid steer loaders sold worldwide come from CNH.”

CNH is a wholly owned by Fiat Spa, the leading Italian auto group.

When food prices rose dramatically in 2007 and the whole agricultural sector stocks were on fire, CNH reach a peak of $70. This past Friday the stock closed at $11.88. Annual dividend growth is about 12%. The current yield is 4.21%. In the latest general meeting, the board approved to suspend the payment of common dividends for the fiscal year ended December 31,2008.

Knowledge is Power: The New Gold Rush Edition

Posted by on

Gold1. Investor interest in gold has accelerated again, with the metal’s dip attracting bargain hunters. Is now the time to buy? Gold investing rush speeds up again

2.Once considered relatively immune to the global economic slump, Latin America is facing hard times as commodity prices crumble, trade dwindles and Venezuela�s oil-funded regional largess begins to dry up.Latin America’s commodity-fueled party is coming to an abrupt end-BRACED FOR A BUMPY RIDE  

3.Central and Eastern Europe has suffered more than most regions as a result of the credit crunch. Hard Landing

4. April 3 (Bloomberg) — The Obama administration, pressing for more fuel-efficient vehicles, won’t block General Motors Corp.’s Chevrolet Volt electric car even after the president’s task force called it too expensive, a person familiar with the matter said.GM’s Volt Said to Remain in Production Plan as Government Seeks Cost Cuts

5.Barack Obama may at last be getting a grip. But he still needs to show more leadership, at home and abroad.The American presidency -Learning the hard way 

Bank ADRs: Leading and Lagging Year-To-Date

Posted by on

2.Credit Suisse –CS
YTD Change:14.40%

3. Westpack banking – WBK
YTD Change:14.11%

4.Banco de Chile – BCH
YTD Change:6.4%

5.Banco Bradesco – BBD
YTD Change:5.67%

6.Deutsche Bank – DB
YTD Change:1.65%

The worst five Bank ADRs YTD are:

HSBC (HBC), Bank of Ireland(IRE), Llyods Banking Group(LYG), Royal Bank of Scotland (RBS) and Allied Irish Banks (AIB). These banks are all down over 39%.All of these banks are from the UK and Ireland.Despite the massive bailout by the British government, British banks are still exposed to heavy losses due to the sub-prime and derivate issues. Also the British economy is in worst shape than other European countries.

Video: Nouriel Roubini On Why He Is Bullish On Asia

Posted by on

The Asset magazine of Hong Kong conducted an interview with Professor Nouriel Roubini of NYU Stern School of Business. In this video, Roubini shares his views on the impact of the global crisis on Asia.

Video Image (Clicking on the image will load the source article in a new window):

Nouriel Roubini

To Play the video directly in your browser go to: Roubini explains why he is bullish on Asia

For a 2-page interesting profile of Professor Nouriel Roubini in pdf format, click here
Source: Finance & Development March 2009, IMF

The Ten Most Popular Stocks In British Mutual Funds

Posted by on

One of the ways that some investors use to identify potential investment opportunities is to analyze the portfolios of many mutual funds and pick the companies that exist across many funds. This strategy basically confirms the most popular stocks among the various fund managers.Retail investors try to simply follow the fund managers’ ideas by investing in these popular stocks.Based on the above idea, the following are the top 10 most popular stocks in the mutual funds(called Unit Trusts and OEIC Trusts) in the UK:

Rank Company
1 BP
2 Vodafone
3 Royal Dutch Shell
4 HSBC
5 GlaxoSmithKline
6 BG Group
7 AstraZeneca
8 British American Tobacco
9 BHP Billiton
10 Nestle

Source:Trustnet, UK

Not surprisingly just one of the companies in the above list is in the banking industry. HSBC Holdings Plc (HBC) is the only British bank that has held up well in the current credit crunch.Though the company acquired the sub-prime lender House International a few years ago in the US, the company was able to writedown most of the losses and prevent further losses in its mortgage portfolio by working with borrowers to modify the terms of the loan. Currently HBC offers a dividend yield of 6.78%.

BP (BP) is the top owned stock in most funds. BP is the third largest global energy company and the second largest component in the FTSE 100 Index.The current yield is 8.31% and the company pays dividends consistently year over year. Royal Dutch Shell, another global oil giant, trades in the US markets under two tickers RDS.A and RDS.B. Both have yields of over 7%.

Vodafone(VOD) is a global mobile telecom services provider.The current yield is 3.76% and the company had total revenues of over $55B last year.

AstraZeneca(AZA) and GlaxoSmithKline(GSK) are two of the large drug makers in the world. AZA and GSK pay a healthy dividend of about 8% and 6% currently. GlaxoSmithKline has a heavy presence in many developing countries.

BG Group is a natural gas distributor with operations in many countries. Their stock trades on the OTC exchange with ticker BRGYY.

British American Tobacco(BTI) is “an international tobacco company, with its brands sold in over 180 markets. Its four Global Drive Brands include Dunhill, Kent, Lucky Strike and Pall Mall.”The current yield is 7.38%.BHP Billiton (BHP) is a diversified mining company with interests in aluminum, copper, energy (thermal) coal, iron ore, nickel, manganese, metallurgical coal, oil and gas and uranium, as well as gold, zinc, lead, silver and diamonds. This is a high beta stock.

Nestle(OTC:NSRGY) is the world’s largest food company based in Switzerland.The stock pays a dividend of 3.48%. Nestle is the owner of many top brands such as Dreyers Ice cream, Nescafe coffee,Maggi Noodles, etc.