In "BRIC Building" I will discuss my favorite stocks and strategies related to emerging markets. Every stock portfolio needs at least 20% BRIC(Brazil Russia India China) exposure so I'll be devoting a whole category to it. In this first post I'd like to talk about two of my favorites, Baidu (BIDU) and Arcos Dorados Holdng (ARCO).
Baidu.com Inc. (BIDU)
This company is the Chinese Google, simple as that. Plus, with Google out of the picture, they have a virtual monopoly. While the stock sells for 65X earnings, sales grew 87% and earnings grew 106% last quarter, easily justifying such a high multiple. Owning anything in China can be risky as the Sino-Forest collapse and Baidu has had some legal problems with the ChiCom recently. That said, Baidu gives you exposure to the hottest economy in the world and I think must own over the next 10 years. Baidu will probably see resistance at it's 50 day MA providing a good entry point.
Arcos Dorados Holding Inc (ARCO)
In Brazil, a Big Mac is $6.10. That's right, twice what is here in America. Arcos Dorados (ARCO) is the largest franchisee of McDonald's in the world and does business in one of the fastest growing places on earth. Doing most of their business in Brazil, Acros is enjoying 25% Revenue growth which should only rise as the world moves out of this most recent slow patch. Everyone needs exposure to Latin America and this is my favorite way to play it. Arcos has been seeing resistance at the $26 level. If it closes above $26 on high volume it should break out.
This is not a recommendation to buy or sell any securities. DAK had no position in the stocks mentioned but that can change at anytime.
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