As I look out over the investment landscape for the New Year I see 4 profitable investment themes playing out. Each offers upside potential for investors. Blending all four into your portfolio this year should lead to strong outperformance. Here are those themes:
Theme #1: Developing Markets
This is the most obvious of the themes; it has been paying off handsomely for the past few years. Since there are no signs of slowing, then I think investors should stay on board.
In essence, developing nations like China, India, Brazil, etc. will be devouring massive amounts of resources to build out their infrastructures to support a booming economy. Certainly one can play commodities like copper or oil to benefit. Yet I think industrials offer the most profit leverage to this trend. Meaning companies that produce machinery that helps keep these new economies humming is where to place your bets.
My favorite industrial to benefit from this trend is Cummins Inc. (CMI - Analyst Report), which makes engines that go into almost every type of large transportation vehicle. As you might imagine, their engines are in high demand for all the new trains, trucks and ships needed to move all the resources that these emerging economies demand. One Wall Street analyst is pounding the table that earnings could nearly double to $11 per share by 2013. That is quite possible, making the current share price very attractive. (more)
No comments:
Post a Comment