Diversify With Brazil

Robert Hsu, March 01, 2008

Imagine traveling a six-lane bridge over to an island 20 miles offshore from Shanghai. The trip takes about 30 minutes. What is so important on this island that it's worth building the largest sea-span bridge in the world?

An equally massive port just opened there in December to help meet the demands of China's exploding growth. This $16 billion port is the size of 470 soccer fields! It will double Shanghai's cargo capacity by 2010.

Believe it or not, the Yangshan port and bridge are not the largest construction project in the world -- or even in China for that matter. That honor belongs to the giant Three Gorges Dam hydroelectric project. If you've ever seen the Hoover Dam, you know it is simply awe-inspiring. Three Gorges is expected to be five times wider than Hoover and is the biggest undertaking since the Great Wall of China was started in 200 B.C.

The fact that the two largest construction projects in the world are both in China is emblematic of the economic miracle taking place there. China is experiencing the greatest boom in the history of the world, which I believe will provide us with the best investment opportunities of our lifetimes. My mission is to help you build your fortune by guiding you to the best of those opportunities.

It is exactly this that I've attempted to do through my two publications, Asia Edge and China Strategy.

However...Although China's tremendous growth is almost unparalleled, we must not overlook or downplay the growth being experienced by other emerging market economies, like those of Brazil, Russia, and India, to name a few. Those of you who've been with me for a long time now will know that I've recommended stocks from each of the aforementioned countries. If you're not a subscriber already and you'd like to learn more about the holdings I've recommended in the past and at present, subscribe to Asia Edge or China Strategy today.

I'd like to take a brief look at some of the Brazilian companies other investors are recommending as good buys. I'm doing this in order to show you the kinds of stocks people are talking about and to offer you additional options that might help diversify your emerging markets portfolio.

Unibanco(NYSE: UBB). One of Brazil's largest banks, UBB provides financial products and services to individual and corporate customers in Brazil. Brazil offers a wealth of natural resources, as well as highly competitive labor costs for manufacturing. Unibanco does an excellent job of increasing employee productivity, while keeping company costs low. With Brazilian stocks, however, you've got to expect wide price swings. The recent volatility in emerging markets (including Brazil) has the price of shares slipping.
Monsanto (NYSE: MON). According to an article posted by Motley Fool, a recent press release from Brazil's agricultural giant announced a higher guidance. This guidance increase suggests that the company is performing well, despite recent volatility in global markets. Monsanto is now chasing after full-year earnings more than 50% higher than last year's. The drawback? The company's upward short-term growth goes hand in hand with commodity prices, which in recent days have fallen due to a strengthing dollar and a drop in oil prices.
Banco Bradesco (NYSE: BBD). BBD is Brazil's second largest private bank, offering a range of banking and financial services locally and internationally to individuals, small to mid-sized companies, corporations and institutions. Unlike UBB, its moderate growth has been significantly less volatile.

If you're interested in learning more about stocks I'm personally recommending in Brazil and in other emerging markets, click here and subscribe to Asia Edge. Register today and gain instant access to my portfolio.