50 Tips For Smart Global Investors

Emerging markets had it rough last week.

For starters, Indonesian stocks fell 8.7%—the largest weekly pullback in nearly two years. Meanwhile, the Indian rupee hit a record low against the U.S. dollar last week while the Brazilian real sank to its lowest level relative to the dollar since December 2008. Looking back further, the picture looks grim. Since May, central banks in the developing world have lost $81 billion in emergency due to capital outflows and currency intervention, according to The Financial Times.

Some of the anxiety surrounding emerging markets is uncertainty over how long the Fed will continue pumping money into the U.S. economy. U.S. Treasury yields tend to have a big impact on borrowing costs around the world, so they are watched closely by indebted countries and firms abroad. When the Fed does end its massive buying program, treasury yields will rise and increase the debt burden on these players.

But from where I’m standing there is another major culprit behind the recent volatility. And this has big implications for where the smart money will go—and where you should consider putting your own money.

Not too long ago, hedge funds were shorting both the Japanese yen and the U.S. dollar to arbitrage higher interest rates in emerging economies. However, as currencies in these emerging markets crumble, these carry trades are unwinding. And as hedge funds run for cover, emerging market investments in Brazil, India, Indonesia and the like can get hit hard.

Now there are still plenty of countries whose currencies are holding up relatively well, such as China, Japan and of course the U.S.  So despite the chaos in some emerging markets, I remain confident that the stock markets in these countries will remain resilient due to the strength of their underlying currencies. Now, I’m not saying you should start loading up on Chinese and Japanese stocks wholesale. However, there are a few choice opportunities in these markets if you stick to the fundamentals.

And today I will help get you started. As to be expected, we’re seeing plenty of upgrades and downgrades among Wall Street’s biggest global stocks due to this rotation. So let’s look at the 50 big blue chips that have been upgraded and downgraded this weekend. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for each of the stocks listed below.

Upgrades

Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
ETP Energy Transfer Partners, L.P. B C
GM General Motors Company B C
PXD Pioneer Natural Resources Company B C
ROP Roper Industries, Inc. B C

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
BIDU Baidu, Inc. ADR  C C
CEO CNOOC Limited ADR D B
D Dominion Resources, Inc. C C
DELL Dell Inc. C C
DG Dollar General Corporation C C
EL The Estee Lauder Companies Inc.  D B
HAL Halliburton Company C C
MBT Mobile TeleSystems OJSC ADR C B
MON Monsanto Company D C
MSFT Microsoft Corporation C B
NJ Nidec Corp. ADR C D
NLSN Nielsen Holdings N.V. C C
SNP China Petroleum & Chemical Corporation ADR D B
SWN Southwestern Energy Company D B
TJX The TJX Companies, Inc. D B
UGP Ultrapar Participacoes S.A. ADR D C
YUM YUM! Brands, Inc. C C

Downgrades

Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
BUD Anheuser-Busch InBev SA ADR C B
DFS Discover Financial Services C B
IR Ingersoll-Rand Plc C C
KEP Korea Electric Power Corporation ADR C C
REGN Regeneron Pharmaceuticals, Inc. C B
SIRI Sirius XM Radio Inc. B D
TWC Time Warner Cable Inc. C B
UTX United Technologies Corporation C B
WBK Westpac Banking Corp ADR C C
WDC Western Digital Corporation B C
WIT Wipro Limited ADR C C
XLNX Xilinx, Inc. C B
XRX Xerox Corporation C B

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
APC Anadarko Petroleum Corporation D C
BMO Bank of Montreal D C
CHU China Unicom (Hong Kong) Limited ADR F B
DD E. I. du Pont de Nemours and Company D C
EBAY eBay Inc. D C
GGP General Growth Properties, Inc. D C
KSS Kohl’s Corporation D C
L Loews Corporation D C
MCD McDonald’s Corporation D C
MRO Marathon Oil Corporation D C
PHI Philippine Long Distance Telephone Co. ADR D C
PRGO Perrigo Company D C
TKC Turkcell Iletisim Hizmetleri A.S. ADR D C
TLK PT Telekomunikasi Indonesia, Tbk ADR  D B
TROW T. Rowe Price Group D C
TTM Tata Motors Limited ADR D C

Sincerely,

Louis Navellier

Louis Navellier

P.S. My Ultimate Growth newsletter currently lists several top global plays—including eight companies based in China, one from Hong Kong and two from Japan. If you’re interested in learning more about Ultimate Growth, which is all about making short-term trades for big-time profits, click here.

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