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Aberdeen Asset Management PLC is an investment advisory and hedge fund firm managing over $55 bn in equities. The following is a list of its top seven buys from the last quarter.

Stock

Symbol

Shares Held - 06/30/2011

Shares Held - 09/30/2011

Change in shares

Oracle Corp.

ORCL

14,015,697

25,078,521

11,062,824

Petroleo Brasileiro

PBR.A

72,581,566

85,632,966

13,051,400

Tenaris SA

TS

43,161,266

52,190,666

9,029,400

PepsiCo Inc.

PEP

8,356,784

11,135,404

2,778,620

Johnson & Johnson

JNJ

15,764,502

17,805,902

2,041,400

Fomento Econ

FMX

24,670,417

26,237,517

1,567,100

Vale SA

VALE

66,649,731

70,835,431

4,185,700

Source: 13f filing

My favorite among above stocks is Oracle Corporation. Oracle Corporation is an enterprise software company which develops, manufactures, markets, distributes and services database and middleware software, applications software and hardware systems, consisting primarily of computer server and storage products. It operates in three segments: software, hardware systems and services. Oracle’s EPS forecast for the current year is 2.41 and next year is 2.65. According to the consensus estimates, its top line is expected to grow 7.80% in the current year and 7.60% next year.

Recently, on its analyst day, Oracle reiterated that its target remains 20% EPS growth rate. This is way above 9-11% current consensus estimates. Clearly, if Oracle is able to execute and post ~20% growth it will surprise the market positively and result in a significant upside in the stock. Oracle also laid out the formula for sustaining 20% EPS growth which appears reasonable. The key points include:

  1. Growing distribution 15-20% with an increased focus on SAAS and verticals.
  2. Leveraging the technology portfolio into bigger deals and market share gains.
  3. Driving new opportunities around Exa, Fusion and other emerging products.
  4. Expanding operating margins above 50%.

In addition to the good growth prospects, Oracle’s strong cash position makes it a good defensive play in current uncertain times and I believe the stock offers a favourable risk reward.

Petroleo Brasileiro is a Brazilian integrated oil and gas company. It operates in five segments: exploration and production; refining, commercialization and transport of oil and natural gas; petrochemicals; distribution of derivatives, electrical energy, biofuels and other renewable energy sources. Petroleo Brasilerio’s EPS forecast for the current year is 3.64 and next year is 3.69. According to the consensus estimates, its top line is expected to grow 19.10% in the current year and 4.50% next year.

Tenaris S.A. is a holding company, which is engaged in the business of manufacturing of steel pipe and distributing operations. The Company operates in two business segments: Tubes and Projects. Tenaris’ EPS forecast for the current year is 2.35 and next year is 3.04. According to the consensus estimates, its top line is expected to grow 28.40% in the current year and 14.10% next year.

PepsiCo Inc. is a global food, snack and beverage company. The Company is organized into four business units: PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe and PepsiCo Asia, Middle East and Africa. PepsiCo’s EPS forecast for the current year is 4.41 and next year is 4.68. According to the consensus estimates, its top line is expected to grow 14.60% in the current year and 3.60% next year.

Johnson & Johnson is a holding company. The Company and its subsidiaries are engaged in the research and development, manufacture and sale of a range of products in the health care field. The Company’s operating companies are organized into three business segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics. Johnson & Johnson’s EPS forecast for the current year is 4.96 and next year is 5.26. According to the consensus estimates, its top line is expected to grow 6.00% in the current year and 4.50% next year.

Fomento Economico Mexicano S.A. is a Mexico-based holding company. Femsa is integrated by a Coca-Cola bottler, OXXO convenience stores and its investments in Heineken. Through its business units such as Coca-Cola FEMSA SAB de CV, the Company is engaged in the production, distribution and marketing of soft drinks and through FEMSA Comercio SA de CV, operates the OXXO convenience-store chain in Latin America. Femsa’s EPS forecast for the current year is 3.53 and next year is 4.22. According to the consensus estimates, its top line is expected to grow 11.10% in the current year and 12.30% next year.

Vale S.A. is a Brazil-based metals and mining company. The Company's product portfolio includes nickel, iron ore and iron ore pellets, manganese ore, ferroalloys, aluminum, fertilizers, copper and coal among others. Vale’s EPS forecast for the current year is 5.01 and next year is 4.62. According to the consensus estimates, its top line is expected to grow 33.90% in the current year and 2.90% next year.

Source: Top Buys Of Aberdeen Asset Management