Fed up with the Bull-ish

Its now the end of our week, and a lot has happened, but it seems like everyone is already looking forward to next week’s Fed Board Meeting. Today, the Fed is not our concern; some people spend so much trying to predict what Mr. Ben S. Bernanke and his cohorts on that sit on the [Federal Reserve] Board of Governors will do, that they forget about the here and now. At Landes, we are doing the exact opposite: we have examined a few sectors have are providing you with some sound advice, for both the domestic and international markets.
First, while there has been a slight recovery in the financial sector, look for value buys on the engineering side. Companies that make “stuff”. The engineering sector is very diverse and is made up of companies that are frequently household names such as, Rolls Royce, ABB, Siemens, and L&T. One of the big reasons that these companies will continue to do well is the fact that in America and globally is because governments are constantly investing in infrastructural upgrades; in the USA it there is an attempt to make everything more green, while in nations with experiencing rapid GDP growth nations such as India and China, they are simply trying to lay the foundations of the World’s next Industrial Revolution. On the small-cap side: Kirloskar Brothers, Honda Siel Power, and Aban Loyd Chiles have all seen sharp gains over the past few months. While on the Big Board: Cummins India, Bharat Electronics, Alfa Laval, Bharat Forge, Thermax, Crompton Greaves, BHEL, Siemens, ABB, Kirloskar Oil Engines and Alstom Projects, have all doubled within one year’s time.

Countrywide

Buy Countrywide (CFC), the Nation’s largest independent mortgage firm. There was never a question of when CW would get bailed out, but merely who would provide the financing to bail them out. Over the past few weeks Countrywide has trimmed its workforce, sold off a 2 billion dollar stake to Bank of America, which (by the way plans to raise ATM fees to the absurd amount of $3) and borrowed over $11,000,000,000. Additionally, in the month of August, less than 4% of new loans originated by Countrywide fell into the Sub Prime category. These efforts combined with low rates still make this a buyer’s market and CW should be able to bounce back, but remember this is a long-term pick. For bond investors, it is important to realize that Countrywide debt carries a Bb2 rating, making it a “junk bond”. With high risk comes higher reward.

Strong Buys
On the other side of the real estate market take a look at Tarragon Corp. (TARR), which has been up since it announced plans to sell a Florida rental property to General Electric Capital. The buzz is that there are more sales to follow. Get in now, the stock in only about $3 and will rise to over $6 by the end of the year. Also a good strong buy is Euro Tech Holdings; everyone likes having fresh water. Last for the week is the big G again, Google. The reason is Google is boost ad revenue and the P/E margins are off the chart. If you can afford it, buy it.

Happy Investing, and have a good weekend.