Baidu a value play? It's gone from buy to strong buy for the stock forecasters at ValuEngine.
World equities are trying to spring to life, but any upside at this point depends on European policy makers. With the S&P apparently whispering about across the board credit rating downgrades in core Europe, investors have no reason to believe the worst of the sovereign debt crisis is behind them.
That systematic risk is undiversifiable in the emerging markets, even if the stock is a defensive utility play. That takes us back to the ValuEngine buy list for the week of Dec. 5. Investors who believe the negative outlook for these high volume names took too much off the price tag may find some value here.
Still, it is buyer beware. Big companies like Petrobras (PBR) of Brazil have been underperforming all year, but the government gave Brazilian ADRs a tax break last week that�s provided extra lift. Sure there is currency risk involved, but with the Brazilian real trading at lows for the year, investors who believe the real�s trading range is more R$1.65 to R$1.75 than R$1.75 to R$1.80 could eventually benefit if their bet that a stronger Brazilian currency is in the cards at some point in the near future.
Baidu (BIDU) is back on the list for the fourth straight week. The Chinese search engine is now listed as not just a buy, but a strong buy. The stock�s performed better than gold year-to-date. For the first time since the Forbes BRIC Breaker blog has been tracking ValuEngine�s big emerging market buy list, China telecom service provide AsiaInfo-Linkage (ASIA) is off the list. Apparently it got a little to expensive over the last week. Meanwhile, China Mobile (CHL) is added to this week�s list, a favorite pick of China growth and income fund managers.
Main Street investors looking for discounted names should stay clear of the Chinese penny stocks listed here. They may be mid-cap stocks, but most are in the solar energy space and that market depends on subsidies from Europe, the core buyer of China�s solar panels. With China on the fritz, China solar has yet to rise. Buyers of these stocks need to program tight stops to minimize risk.
Here is a look at the top buy recommendations for the week, as ranked by the stock forecasters at ValuEngine.
Company Country Rating* P/E Div
Ambev (ABV) Brazil 5 23.8x 4.24%
Baidu (BIDU) China 5 52.09x �
BrasilFoods (BRFS) Brazil 5 20.15x 1.70%
China Mobile (CHL) China 4 10.26x 4.17%
CTrip.com (CTRP) China 5 22.21x �
Cosan Ltda. (CZZ) Brazil 4 4.45x 2.29%
Eletrobras (EBR) Brazil 5 5.24x 0.10%
Embraer (ERJ) Brazil 4 14.19x �
Fibria Celulose (FBR) Brazil 4 N/A 4.6%
Gerdau (GGB) Brazil 4 11.98x 3.27%
Hanwha Solarone (HSOL) China 4 2.36x �
Infosys (INFY) India 5 19.10x 1.40%
JA Solar Holdings (JASO) China 4 3.67x
LDK Solar (LDK) China 4 8.88x
Mobile TeleSystems (MBT) Russia 4 13.28x
Netease.com (NTES) China 4 12.79x
Petrobras (PBR) Brazil 4 7.09x 4.58%
Sterlite Industries (SLT) India 4 26.43x 1.93%
Sohu.com (SOHU) China 4 12.09x �
TIM Telecom (TSU) Brazil 4 7.87x 3.0%
Telefonica Brasil (VIV) Brazil 5 10.19x 11.59%
VanceInfo Tech (VIT) China 5 19.01x �
Wipro Ltd (WIT) India 4 23.97x 1.32%
Youku.com (YOKU) China 5 (no data/volatile)
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