EcoPetrol SA – A Newly Listed Colombian Stock in NYSE

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EcoPetrol SA (EC) , the only integrated oil and natural gas company in Colombia, listed its stock today on the New York Stock Exchange as an American Depository Shares (ADS). Each ADS share represents 20 common shares.In November 2007, the company had a successful IPO in the Colombian stock market raising about US $10B. The initial IPO price of the stock on Nov 26,2007 was Colombian Pesos 1.4000. This Friday it closed at 2.580 Colombian Pesos (CP). Thats a growth of about 84%. So EcoPetrol common has had a tremendous run down in Colombia. As the demand for oil grows and the price of crude goes up and down in this tough market, EcoPetrol is definitely worth watching for a US investor.

The following are some facts about EcoPetrol:

1.EC is already up $5 since it started trading from a low of $22.40. Now it goes for $27.35

2. Revenue was $15B for 12 months ending June 30,2008.

3. The comapny’s logo is an Iguana.

4. Net income in 2007 was $2.57 B compared with $1.68B in 2006.

5. Foreign sales accounted for 28% of revenue in 2007.

For more info visit EcoPetrol’s IR site.

Top Foreign Chemical Stocks

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Chemicals

One of the defensive sectors that investors tend to overlook during volatile market conditions is the chemical sector which has many high quality companies with stable long-term growth.

In modern times chemicals are an active ingredient in most of the products we use. They are used for enhancing the texture in cereals, keeping the fragrance in dish washing liquids, airfreshners, adhesives for packaging, making of drugs, paints, etc. So similar to diversifying one’s portfolio with consumer stables like food stocks, one can also pick up some of the top chemical stocks.

To review some of the top chemical companies of the world that trade in the US, I used the “ICIS Top 100 Chemical Companies 2008” list released by ICIS Business on September 15,2008. This list contains all the chemical firms with annual sales of more than $2.5 B. A A total of fourteen foreign stocks are in the list.Some of them like Bayer trade in the OTC market while the rest trade on the New York Stock Exchange.

1. BASF (BASFY) is the world’s largest chemical company with annual sales of $85.0B in 2007. It has a 6.07% yield. The yield has grown at 18.2% for the past 5 years and revenue has increased by just over 10.0%.

On September 15, the day Lehman Brothers died this German chemical giant announced that it will acquire the Swiss specialty chemical maker Ciba for $2.9B in cash.

2. Bayer (BAYRY), another German company, ranked number twelve in the Top 100 list. Sales increased 11.8%(in Euros) from 2006 to 2007. The current yield is 2.64%. Bayer has significant presence in the health care industry with popular brands like Aleve,Alka-Stelzer,Cipro,etc.

3. The Dutch company Akzo Nobel (AKZOY) trades in the OTC market with ticker AKZOY. The company manufactures specialty chemicals, paints and coatings. Last year AKZOY acquired famous British paint-maker Imperial Chemical Industries (ICI) plc and this year sold part of ICI to Henkel AG of Germany. The stock has a yield of 7.48% and the revenue has been almost flat for the past 5 years. The ICI acquisition should help Akzo Nobel expand its market share in the paint segment. In 2007, the company had sales of $21.0B.

4. Yara International (YARIY) of Norway is an agricultural chemical manufacturer. As the demand for fertilizers increased exponentially last year the stock took off. After reaching a peak of $90 the stock currently goes for $37.

5. Air Liquide (AIQUY) is a world leader in industrial and medical gases with operation sin 75 countries. Sales in 2007 was $17B which is 7.8% higher than 2006.The stock has a yield of 2.76%. France based, Air Liquide is a constituent of the DJ Euro Stoxx 50 Index which is made up of the largest European countries (excluding UK).

6. Braskem(BAK) is an integrated petrochemical and thermoplastics producer in Brazil.Revenue has grown 16% in the past 5 years.The current yield is 6.36% and the PE is 8.57. Braskem has lower EPS and Revenue growth compared to the industry.

7. The Swiss agricultural chemical maker is Syngenta (SYT). The stock a yield of 1.97% and the PE is 15.80. Syngenta has increased dividends by 30.5 years in the past 5 years. Sales is up 20% for the fist half of 2008 compares to the same period last year.

8.Solvay SA (SOLVY), is a Belgium based firm operating in the pharmaceuticals,chemicals and plastics sectors. Total sales in 2007 was $10.2 B. Earnings growth in past 5 years was 11%.Current yield is 4.59%.

9.Arkema (ARKAY) is a spinoff from the French oil giant TotalFina. It has a 2.9% yield.

10. The specialty chemicals company Rhodia (RHAYY) is based in France. The dividend yield is 2.29%. This yield is in-line with the industry average.

11. Nova Chemicals Corp.(NCX) is a Canadian chemical manufacturer with a sales of $6.7B in 2007. The P/E ratio is 7.31. While the revenue has grown 17% annually for the past 5 years the dividend growth rate has been flat.

12. South Africa based Sasol (SSL) is a major oil and gas company with substantial interests in chemicals. The stock is down only 14.10% in the past 52 weeks. Sasol is expanding operations in China and Iran besides many African countries. The yield is 5.38% and the S&P rating on the stock is 4-stars.

13. Potash Corporation of Saskatchewan Inc. (POT) of Canada is a fertilizer manufacturer. POT had a great run last year when the demand for fertilizers went up. The stock is expensive with a P/E ratio of 25.65. The revenue and dividend has increased about 18% and 16% annually over the past 5 years. After reaching $241.62 in June this year today it closed at $163.50.

14. Like Potash Corp., Agrium (AGU) is another Canadian fertilizer maker with operations in the US, Argentina and Chile. The current yield is 0.15% and the P/E ratio is 10.84.

As per the ICIS Chemical Business Top 100 report, in 2007 chemical companies continued to grow strongly. In the first half of 2008 the stocks have held up well. But the second half is proving to be tougher due to the sharp economic downturn in the US economy. The M&A activity is worth watching in this sector as some of the major players try to snap up companies in the specialty chemical sector since they have higher profit margins. In July Dow Chemical paid a 74% premium to acquire Rohm and Hass, a specialty chemical maker.

An investor looking to add some exposure to foreign chemical stocks may evaluate some of the stocks mentioned above since these companies are the largest in the world on the basis of total sales.

The Most Traded Asian ADR Stocks

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Stock markets worldwide are in free-fall mode past few days. Latin America emerging markets have a fallen heavily and so is the Asian markets. Brazil is down over 40% from its recent peak due to the crash in commodity prices. Asian markets like China, India, Vietnam,Singapore have been crushed as well. Shanghai is down over 50% year to date. The Olympics hype did not help the Chinese markets. India has been rolling over for a few months now after reaching the peak with no end in sight in the near term.

Many Chinese and Indian companies are listed as ADRs in the US markets. It helps to see how some of these Asian ADRs are performing in the current situation. The following table shows the most traded Asian ADRs on a daily basis and the year to date change:

[TABLE=2]

Doubled Dividend Stocks

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Many companies raise the dividends on their common stock year over year.There are some stocks whose dividends have more than doubled in six years. In this article lets review ten such international stocks and see how they have fared so far this year.

For this study, the stocks were analyzed using the following criteria:

1. Use only Non-Financial stocks.

2. Dividends must have doubled or more than doubled in the past 5 years .

3. Stocks that cut or reduced dividends in those five years do not qualify.

4. All stocks must be foreign stocks.

5. Evaluate only common stock.

6. Exclude tax and currency fluctuations.

5-Year Historical Dividend Growth Rate

[TABLE=97]

Magyar Telecom has the best 5-year dividend growth rate of 52.45%.The second best dividend grower is Encana (ECA) from Canada at 45.28%.

Ten Dividend Doubled Stocks Year-To-Date Change and Current Dividend Yield

[TABLE=96]

Note: Data listed above are thought to be accurate at the time of posting.Do your own research before making investment decisions.

Analysis:

1. The above list is dominated by Telecom and Energy (oil and gas) stocks. While the oil and gas stocks are to be expected due to rising prices in the past few years, the telecom sector is a surprise.

2.MTA and NZTCY have current high dividend yields. New Zealand stocks are known for their high dividend payouts. So the lone Kiwi stock listed in the US made it to the list.Magyar Telecom is a consistent stable performer from Hungary. The other telecom stocks TEF and PT have above average dividend yields as well.

3. Due to rising crude oil and natural gas prices in the past years, energy stocks have had tremendous runs.Except the Canadian oil and gas producer Encana, the Spanish company Repsol and Italian Enel have high current dividend yields .

4. The French utility Veolia has a decent dividend at 4.16% but the stock is down over 50% this year. Probably a good entry point at the current price.

5.Though Sasol is classified as an oil and gas stock, this South African major has interests in the chemical business also.Sasol is now in its growth phase with the company announcing a R70B expansion plans for the next three years. The projects will be undertaken in countries like Nigeria, Qatar, Papua New Guinea.

6. British American Tobacco, BTI is a UK based company engaged in the tobacco business with brands like Dunhill, Kent, Lucky Strike, etc. BTI is an international tobacco play.Recently BTI expanded operations in Turkey after a major acquisition there. Some of its competitors are the American Phillip Morris International (PM) , Imperial Tobacco(ITYBY), etc. With a decent yield, BTI is a long-term growth stock.

The above ten non-financial stocks are worth watching thru the rest of the year and in the future due to the attractive dividend yield and past dividend increases.

Disclosure: None

One Dutch One British ADR

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Koninklijke Philips Electronics NV (PHG) from Holland and Tomkins plc (TKS) from the UK are two industrial stocks from the S&P; ADR Index.

Philips Electronics (PHG) is mainly a consumer electronics maker. The company is known worldwide for light bulbs, radio, televisions and other devices. Philips also makes many high-end devices for the medical industry.

PHG has a dividend yield of 3.59% and a PE of 7.43. The stock is almost 50% off the 52-week high of $45.57. The annual dividend growth for the past 5 years is about 14%.At current levels PHG seems to be inexpensive and is a good pick since it has a diversified portfolio of products in different fields. Philips is a highly famous brand in many developing countries.

Tomkins (TKS) is an engineering and manufacturing company with operations in industrial, automotive and building products.

TKS has a dividend yield of 8.03% but the stock is down about 43% in the past 52 weeks. It is a mid-size company with a market cap of about $2.5B. The demand for auto parts is falling and Tomkins took an impairment charge of $175M in July. With the British economy in recession and the demand for its products in decline, Tomkins is better avoided now. We will revisit this stock next year.