A 'fire sale' on small foreign stocks
All the best values are overseas, says Peter Schiff. He picks five foreign stocks with low prices and big dividends.
By Brian O'Keefe, senior editor
January 23, 2009: 10:13 AM ET
(Fortune Magazine) -- Peter Schiff believes the dramatic selloff in foreign markets last year has created tremendous opportunities.
"There's a fire sale going on right now in assets that have been thrown out over the past several months by people who believe there's going to be a global depression," he says.
But following his advice means wading into unfamiliar waters. His favorite stocks right now are all small - or very small - issues traded on foreign exchanges; he avoids big global players that trade on U.S. exchanges because they tend to be well-known and thus fully valued, and have too much exposure to the troubled U.S. economy. (If you're up for the adventure, some brokerages, such as Charles Schwab, allow U.S. investors to buy stocks directly on foreign exchanges.)
Here are five of Schiff's current choices.
Ascendas-REIT (SIN : A17U)
* Price on Jan 12: $0.95
* 52-week range: $0.75-$2.00
* Dividend yield: 11.4%
* Market cap: $1,382 million
This Singapore-based real estate investment trust owns some 90 office properties, with a focus on industrial and research parks. Schiff believes it is well structured to survive a recession.
Duet Group (ASX: DUE )
* Price on Jan 12: $1.35
* 52-week range: $1.07-$3.29
* Dividend yield: 14.0%
* Market cap: $852 million
Schiff says that this Australian utility has been growing its dividend distribution faster than the industry overall. An expansion of its natural-gas properties last year should allow that to continue.
Singapore Petroleum (SIN : S99)
* Price on Jan 12: $1.58
* 52-week range: $1.25-$6.01
* Dividend yield: 25.5%
* Market cap: $816 million
The collapse in oil prices has slammed this refiner: It trades at less than five times 2009 estimated earnings and for just 70% of book value. Should be a big winner in a recovering Asian economy.
Skyworth Digital (HKG: 0751)
* Price on Jan 12: $0.06
* 52-week range: $0.04-$0.13
* Dividend yield: 11.8%
* Market cap: $137 million
Pointing to forecasts that Chinese flat-screen TV demand will grow to 28 million units in 2010, Schiff says this tiny Hong Kong manufacturer is set to profit in the mainland's mid-price market.
Vitasoy International (HKG: 0345)
* Price on Jan 12: $0.41
* 52-week range: $0.34-$0.51
* Dividend yield: 3.6%
* Market cap: $420 million
Schiff is excited about this Hong Kong soy-beverage maker's strong cash flow as well as its post-melamine market opportunity in China, where it grew sales by 60% in its last financial year.
AI
