I could not help imaging what will Ken Fisher and John Hussman say to each other if they ever meet. The former is always optimistic towards the stock market and the later has a tendency to be skeptical towards things.
While Hussman has been calling the stock market “overvalued, overbought, overbullish”, and facing rising-yields condition environment. Fisher has been characteristically bullis. It is true that in long term, stock market goes up, so chances are he is more often to be right than wrong. As he wrote in his latest column in Forbes.com, he founds his recent bullishness on the global economic growth, the low interest environment and presidential term cycle. And dear to the value investors ears, if you believe what he says:This should be a relatively easy year for stock pickers. There is an abundance of cheap stocks relative to interest rates, especially if you look beyond our borders.
In this column article, Fisher recommended these stocks that are based beyond the borders of the US but are traded in the US market:
Take Tim Holding(NYSE:TSU), Brazil's third-largest cellular carrier, with over 190 million customers and more revenue per customer than any vendor. Tim is a leading seller of iPhones in Brazil. After a tough last few years expect top-line revenue growth but more on the bottom line as profit margins expand. Unemployment in Brazil is dropping, and that's boosting mobile subscriber rates. Expect to see this well-run firm increasingly in institutional portfolios--boosting its P/E ratio. It sells at one time annual revenue and 16 times my estimate of 2011 earnings.
Then buy Tim Hortons(THI)-- Canada's largest fast-food chain. Franchise-based, with a heavy emphasis on coffee and baked goods, it's sort of a cross between Starbucks and McDonald's (it actually wins in competition with McDonald's) and has been larger in Canada than Mickey D's for eight years. Non-Canadian growth will continue, and it will gain a growing global presence, with more than 3,500 locations. It sells at 13 times my estimate of 2011 earnings.
Ohio-based Timken (TKR) is an old cyclical favorite. Its antifriction and power-transmission components, bearings, specialty steels, seals and lubricants are basic to any economic expansion and will be throughout this one. Every downturn it gets crunched. In every expansion it's underestimated. It should be no different this time given that 60% of its sales still come from the U.S. Profit margin expansion should be huge. It sells at 13 times my estimate of 2011 earnings, but before 2012 it should be selling on much fatter 2012 profits. So buy all three Tims (without timidity)!
Chilean-based Enersis(ENI) is Latin America's biggest private electrical power generator--in Argentina, Brazil, Chile, Colombia and Peru. Moderate growth should continue through this business cycle, and this stock is a reasonably priced way to play Latin America's growth. Don't expect it to be a home run, but it is relatively low risk. It sells at 12 times my estimate of 2011 earnings.