Sunday, 15 January 2012

Marc Faber's stock picks in Singapore and Hong Kong

Interesting (long!) article, "the Barron's 2012 Roundtable" with interesting people like Marc Faber and Felix Zulauf.

Lots of global macro stories, not all that rosy (to put it mild).

Faber is positive about Singapore and Hong Kong, and gives a few stock tips:

Singapore tips from Faber:
  • SATS which provides catering services to the airline industry and ports. It yields 5% and trades for 13 times earnings.
  • K-REIT Asia Management, a real-estate investment trust that yields 7%. The stock has fallen by about 50% and the dividend might be cut. But even if it is cut to 4%, this is an OK investment.
  • StarHub, the mobile-phone company, yields 6.9% and the P/E is 14.
  • Luxury-property developer like Wing Tai Holdings already sells for half its book value.
  • Fraser & Neave is a conglomerate similar to Swire. It sells for 10 times earnings and yields about 3%. It could become a takeover target at some point.
The Hong Kong market was hit hard, and stocks haven't bottomed yet. But you can buy Sun Hung Kai Properties [16.Hong Kong], with a P/E of five and a yield of 3.5%. Swire Pacific [19.Hong Kong] is a blue-chip, a well-managed conglomerate. It yields almost 5% and the P/E is 11. Hang Seng Bank [11.HK] yields 5.6% and trades for 11 times earnings. There isn't a huge risk in these stocks, but maybe I'm too bullish.

The full article:

Here is a link from Cullen Roche who estimated the returns of the forecasters of the Roundtable:

The long term returns of Zulauf and Faber are clearly the best:

Annualized Returns: 2002-11
Felix Zulauf 25.1%
Marc Faber 23.4%

Very good results, considering that the S&P 500 returned zero over ten years, "the lost decade".

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