It's an Emerging World: BRIC Stocks Dominate IBD 100

China stocks and other emerging market plays are nothing new here, but I was surprised to see how many BRIC (Brazil – Russia – India – China) stocks placed in this week's IBD 100.

The IBD 100 is a list of technically and fundamentally leading stocks generated using the Investor Business Daily's proprietary techniques. While the exact formula is a black box, one thing is certain: the IBD 100 list is where mo-mo investors tend to lurk.

The heavy concentration of emerging market stocks suggests that American investors may have waded in too deep. I'm only in a few emerging market stocks (none listed here), but this list makes me wary. If everyone else has discovered them, the upside may be limited. Here's the BRIC stocks in the IBD 100:

1. China: Home Inns & Hotel Management (Nasdaq:HMIN)

3. China: Ctrip.com Intl. ADR (Nasdaq:CTRP)

5. China: Vanceinfo Tech ADS (NYSE:VIT)

9. Brazil: Mercadolibre Inc. (Nasdaq:MELI)

10. China: China Automotive Systems (Nasdaq:CAAS)

12. China: Smartheat Inc. (Nasdaq:HEAT)

13. China: AsiaInfo Holdings (Nasdaq:ASIA)

15. Brazil: Gafisa S.A. ADS (NYSE:GFA)

17. China: Telestone Technologies (Nasdaq:TSTC)

18. China: Jinpan International Ltd. (Nasdaq:JST)

20. China: Baidu Inc. (Nasdaq:BIDU)

22. India (kinda): Cognizant Technologies (Nasdaq:CTSH) [note:this one is really based in NJ for its corporate headquarters, but it is an offshoring BPO company with a heavy presence in India]

25. China: CNInsure Inc. ADS (Nasdaq:CISG)

28. Russia: Vimpel Communications (NYSE:VIP)

32. China: Wuxi Pharmatech (NYSE:WX)

35. China: China Agritech (Nasdaq:CAGC)

37. India: Wipro (NYSE:WIT)

38. China: Harbin Electric (Nasdaq:HRBN)

41. China: E-House Holdings (NYSE:EJ)

43. China: Longtop Financial Technologies ADS (NYSE:LFT)

48. India: WNS Holdings ADS (NYSE:WNS)

56. Russia: Wimm Bill Dann (NYSE:WBD)

59. Brazil: Compania Brasileira (NYSE:CBD)

65. China: A-Power Generation (Nasdaq:APWR)

71. Brazil: Compania de Bebidas (NYSE:ABV)

84. China: Duoyuan Global Water (NYSE:DGW)

93. India: Infosys Technologies ADR (Nasdaq:INFY)

Other emerging markets represented include: Argentina (No. 99 Banco Macro SA) (NYSE:BMA), Panama (No. 95 Copa Holdings SA) (NYSE:CPA), Mexico (No. 67 TelMex Intl. SAB ADS) (NYSE:TII), Israel (No. 66 Given Imaging) (Nasdaq:GIVN).

DISCLOSURE: No positions.

Comments

[Alphameister]

"The heavy concentration of emerging market stocks suggests that American investors may have waded in too deep."

I noted the same phenomenon but drew a different conclusion. American investors have discovered where the best fundamental growth prospects can be found these days. Being more of a value investor than a momentum player, I've taken extensive profits lately in the two stocks on your list that I own (APWR and TSTC), but I'm hoping to rebuild those positions on a pullback.

2009 Dec 21 09:31 AM

[AxIt]

I agree on your conclusion. I allocate part of my capital for value plays and part for momentum plays. Value plays are currently mostly in emerging markets and APWR is one of them. I will not sell this stock for the next two years unless my profits on it go to zero (currently is 90% up).

On Dec 21 09:31 AM Alphameister wrote:

> "The heavy concentration of emerging market stocks suggests that
> American investors may have waded in too deep."
>
> I noted the same phenomenon but drew a different conclusion. American
> investors have discovered where the best fundamental growth prospects
> can be found these days. Being more of a value investor than a momentum
> player, I've taken extensive profits lately in the two stocks on
> your list that I own (APWR and TSTC), but I'm hoping to rebuild those
> positions on a pullback.

2009 Dec 21 09:45 AM

[wind4me]

BIG , BIG MISTAKE on taking profits in (APWR)

U wont beleive the ""MISTAKE"" U just made

www.Wind4me.com

mark down the ''2nd BILLION DEAL"" coming date and time!


On Dec 21 09:31 AM Alphameister wrote:

> "The heavy concentration of emerging market stocks suggests that
> American investors may have waded in too deep."
>
> I noted the same phenomenon but drew a different conclusion. American
> investors have discovered where the best fundamental growth prospects
> can be found these days. Being more of a value investor than a momentum
> player, I've taken extensive profits lately in the two stocks on
> your list that I own (APWR and TSTC), but I'm hoping to rebuild those
> positions on a pullback.

2009 Dec 21 05:52 PM

[wind4me]

lets see, (APWR) will do 5 billion in REVENUES by 2015 and he is selling his APWR ???? Traders never win, Traders only TRADE themselves out of their positions!
www.Wind4me.com

On Dec 21 09:45 AM AxIt wrote:

> I agree on your conclusion. I allocate part of my capital for value
> plays and part for momentum plays. Value plays are currently mostly
> in emerging markets and APWR is one of them. I will not sell this
> stock for the next two years unless my profits on it go to zero (currently
> is 90% up).
>
> On Dec 21 09:31 AM Alphameister wrote:

2009 Dec 21 05:53 PM

[beijingpaddy]

The long term trend is for capital to be moving from the developed to the developing markets. For retail investors like myself buying long, I am just trying to catch a ride on the same train.
Not all developing markets carry the same risks and rewards, not all sectors within these markets will be the same, and individual stocks results will have a lot to do with the company behind the stock. That said, unless there is war or revolution in those countries, these will be the markets that will reap the biggest gains, generally speaking VS. developed markets.

Over the last ten years I have made lots of money; first in Chinese ADRs listed in the USA and am now doing the same with the penny stocks of some of China's largest enterprises that are traded on the HK Exchange. This is not just following the herd but instead following the money trail of the Big Guys. Someday these will leave for greener pastures, but at least for HK when that happens, the Chinese government will open the flood gates to allow Chinese retail investors in. And when they do (and they will), those who have already invested in HK listed securities will get rich fast.

2009 Dec 22 05:02 AM

[HaavBline]

Given that most of this and next years global growth will be from Emerging Markets especially China and India, one can easily make the opposite conclusion, that there should be more than the 31 stocks from emerging markets on the IBD100 list, if American investors are fully taking advantage of the emerging markets growth potential.

17 Chinese stocks, and dominating the top of the list, do seem a little too much. China certainly can not claim to be 'undiscovered' now.

2009 Dec 22 02:19 PM

[GARP]

Like most here, I must also say that I do not come to the same conclusion as the author. Further, the word, "mo-mo" has no place in an any article where the author intends to be taken seriously.

2009 Dec 27 06:07 PM

[silver-bug]

I noticed that APWR kills the top stock on the IBD 100 list: HMIN. That's very good news for APWR. Most people or big funds haven't set their eyes on APWR yet, and it's still under the radar for them. It shows that only 10% of APWR shares are held by mutual funds. That means that APWR is getting double-digit gains without the big funds buying in. Imagine when the big funds do start buying in!

All aboard! Next Stop to the Moon!

2009 Dec 28 02:10 PM

[silver-bug]

% of shares held by Mutual Funds for HMIN: 17%


On Dec 28 02:10 PM silver-bug wrote:

> I noticed that APWR kills the top stock on the IBD 100 list: HMIN.
> That's very good news for APWR. Most people or big funds haven't
> set their eyes on APWR yet, and it's still under the radar for them.
> It shows that only 10% of APWR shares are held by mutual funds. That
> means that APWR is getting double-digit gains without the big funds
> buying in. Imagine when the big funds do start buying in!
>
> All aboard! Next Stop to the Moon!

2009 Dec 28 02:13 PM