In a recent interview, famed investor Jim Rogers offered insight
into his investment strategy that appears to defy logic on the
surface. However, a careful look into his investment idea offers a
golden opportunity for investors seeking a higher ROI.
The author of
Street Smarts: Adventures on the Road and in the Markets
is more interested in 'beaten-up' stocks now. Instead of buying
U.S. stocks when the Dow and the S&P 500 indices are trading
near all-time highs, Rogers is aggressively shoring up shares in
markets like China and Russia.
Why These Markets?
While justifying his decision to invest in a market that is down
65% from its zenith, Rogers argues that latest capital market
reform guidelines in China make it a lucrative investment
proposition in the long run. The new set of reforms aims to open up
the tightly-controlled financial sector by developing a
multi-layered equity market. There will be an improved share
transfer system for small and medium-sized enterprises through a
registration-based IPO system.
Local governments are likely to build regional equity-exchange
markets, while its bonds connect the inter-bank bond market with
stock exchanges. The proposed reforms are likely to protect the
interests of investors and boost the beleaguered financial sector.
On his thoughts on the Russian market that is reportedly the
"second-most hated stock market in the world," Rogers is candid in
his confession to profit from a scenario when the stock market is
down due to political crisis and is likely to move up in the long
term. Although the stock market fell 10% in March, owing to the
continued turmoil in Crimea and struggle for control of Ukraine,
Rogers had invested heavily in Russian stocks. In fact, he even
vows to continue doing so.
3 Stocks to Bet On
In order to profit from his strategic advice, we have picked three
stocks from these markets that are likely to outperform the broader
equity market. Along with a favorable Zacks Rank, these stocks
belong to industries that have a 'Positive' Zacks Industry Rank. As
a guideline, the outlook for industries with Zacks Industry Rank
#88 and lower is 'Positive,' between #89 and #176 is 'Neutral' and
#177 and higher is 'Negative.'
JA Solar Holdings Co., Ltd.
Headquartered in Shanghai, the People's Republic of China, JA Solar
develops photovoltaic solar cells and solar power products based on
crystalline silicon technologies. Earnings estimate revisions for
this Zacks Rank #1 (Strong Buy) stock have moved up in the last 7
days, implying bullish sentiment for the long-term growth of the
company. JA Solar belongs to the Solar Industry that carries a
Zacks Industry Rank #37. The company had an earnings surprise of
300.0% in the last reported quarter.
Trina Solar Ltd.
Headquartered in Changzhou, the People's Republic of China, Trina
Solar manufactures integrated solar-power products for use in
residential, commercial, industrial and other solar power
generation systems. Analysts have been moving their quarterly and
full-year estimates higher of late, further suggesting a solid
earnings momentum in the upcoming quarter. Trina Solar has a
forward PE of 13.2x. It reported an earnings surprise of 225.0% in
the last reported quarter. This Zacks Rank #1 (Strong Buy) stock
belongs to the Solar Industry as well.
Based in Moscow, Qiwi operates electronic online payment systems
primarily in the Russian Federation, Kazakhstan, Moldova, Belarus,
Romania, the United States and the United Arab Emirates. Over the
last 7 days, earnings estimates did not show any upward or downward
revisions for the year. Despite a lack of estimate revisions, we
see an uptrend for the stock backed by its strong growth potential.
With a forward PE of 22.6x, PEG ratio of 1.1x and a year-over-year
return of 97.4%, this Zacks Rank #3 (Hold) stock is a solid pick.
Qiwi belongs to Financial Transaction Services Industry, which has
a Zacks Industry Rank #85.
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JA SOLAR HOLDGS (JASO): Free Stock Analysis
QIWI PLC-ADR (QIWI): Free Stock Analysis Report
TRINA SOLAR LTD (TSL): Free Stock Analysis
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