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At the midpoint of the year, the InvestorPlace Best Stocks for 2014 contest is a neck-and-neck race…for 5th place.

My pick for 2014 - South African mobile phone giant MTN Group (OTCPK:MTNOY) - is up about 4%, slightly trailing the S&P 500, and slugging it out for 5th place with John Jagerson and Wade Hansen's Financial SPDR (NYSEARCA:XLF) and Brendan Conway's Vanguard Dividend Appreciation ETF (NYSEARCA:VIG).

John Markman's pick - niche MLP Emerge Energy Services LP (NYSE:EMES) - is running away with it this year with gains of 144%. Kyle Woodley's pick - last year's momentum darling Tesla Motors (NASDAQ:TSLA) - continues to defy bears (such as myself) and a sky-high valuation with year-to-date returns of 61%. Rounding out the top four are Bryan Perry's Banco Santander (NYSE:SAN), which is also a favorite long-time holding of my newsletter, Macro Trend Investor, and Louis Navellier's FleetCor Technologies (NYSE:FLT) with returns of 20% and 13%, respectively.

My congratulations on the fantastic returns by a worthy group of competitors. But now, in the second half of the year, is where it gets interesting.

Emerge Energy Services is a major supplier of sand to the major domestic shale oil drilling sites, putting it in excellent position to benefit from one of the most powerful macro trends of the next decade. But it's also a wildly volatile stock with a high short interest and a variable cash distribution currently yielding about 4.6%. There are some wildly optimistic assumptions built into EMES's stock price, so any small hiccup could send the shares tumbling. Though with such a massive lead on the rest of the Best Stocks competition, Markman's pick will be tough to beat.

Tesla - much to my surprise - has managed to claw back most of its losses from the March-May selloff in momentum stocks. But Tesla's prospects look questionable at best to me given its lofty valuation. Tesla trades for 14 times sales, compared to 0.60 and 0.79 times sales for Daimler (OTCPK:DDAIF) and BMW (OTCPK:BAMXY), respectively.

That simply should not be; Daimler and BMW are the world's premier automakers. I don't see a realistic set of conditions in which Tesla grows into its current valuation. Of course, in a one-year contest, long-term concerns like these matter far less than momentum and sentiment.

Enough about the competition. How does MTNOY look in the second half?

MTNOY was hobbled in the first half by a weak South African economy, a polarizing presidential election, and a five-month miners' strike that had soured investor sentiment towards the country. The good news is that the rand looks to have stabilized for now, and the presidential election and miners' strike are now history. As investors rotate out of the fully-valued U.S. market and into recovering emerging markets, Africa will be a destination of choice. Africa is one of the few bright spots for global growth right now, and MTNOY is a direct play on the rise of Africa's middle classes.

Let's review the bullish arguments for MTNOY:

  • It's the dominant mobile provider in the last great frontier market: Africa.
  • It provides a service that is essential to the lives of the new African middle classes.
  • Its markets are far from saturated, and it has virtually unlimited growth potential due to the inevitable shift to smartphones and higher-margin data plans; only about a third of MTN's subscribers currently use data.
  • It's very reasonably priced and pays a high and growing dividend; MTNOY stock has a dividend yield of 4.6%.
  • MTNOY stock trades at a reasonable price/earnings ratio of 16.

Bottom line: MTNOY is an excellent stock to buy and hold for the next decade. But I also expect it to make a competitive race out of the Best Stocks contest in the second half. Stay tuned.

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Source: MTN Group: Looking For A Strong Finish To 2014