Monday July 13, 2009
"Inflationary fears and the desire to generate higher returns in non-dollar assets should boost BRIC stocks (Brazil, Russia, India and China)," says Chuck Carlson in his The DRIP Investor.
"Despite the run-up this year, BRIC stock markets are still reasonably valued. Russia, India, and Brazil all trade at price/earnings ratios similar to the U.S.
"And while China’s stock market does trade at a premium to the U.S., China’s economic growth will swamp that of the U.S. this year and for the foreseeable future.
"Bottom line: When considering where to allocate international dollars, the case for a greater allocation to BRIC countries is compelling.
"Among the BRIC stocks, I especially like Baidu (NASDAQ: BIDU) and China Mobile (NYSE: CHL).
"Baidu, based in China, provides Internet search services primarily in China and Japan. The company is often compared to Google in terms of its dominance in the search market in China.
"China Mobile, based in Hong Kong, operates the world’s largest mobile network with the world’s largest mobile subscription base of more than 477 million subscribers. The company commands roughly 70% of the wireless market in China.
"India-based companies worth considering include Dr. Reddy’s Labs (NYSE: RDY), a pharmaceutical concern; Infosys Technology (NASDAQ: INFY), a systems software firm; HDFC Bank (NYSE: HDB), a banking concern; and Wipro (NYSE: WIT), an Information technology company."
