By Louis Navellier - Nasdaq.com
Lots of investors are clamoring over China right now because stocks there have experienced phenomenal growth since January 1, 2009. There’s no mystery behind China’s appeal: The country has experienced robust economic growth even in the worst of the recession, including a nearly 9% annualized gain in GDP for the third-quarter that makes it one of the world’s fastest growing economies. There are certainly big opportunities in China, and I continue to recommend a number of Chinese stocks to individual investors. But a huge portion of those blowout gains have already been realized. Like it or not, the boat has sailed on many China stocks now that they’ve run up 200%, 300% or even 500% in a matter of months.
That’s why I want to let you in on a little secret: Brazil is the next China.
Brazil has all the signs of an emerging powerhouse. The nation’s currency, the real, has already gained 36% against the U.S. dollar so far this year on the strength of Brazil’s economy. And as of October, the three-month moving average for the inflow of foreign capital to Brazilian stocks was $5.19 billion, or an increase of 159%.
But it’s not just big-picture stats like that prompting me to think Brazil is the next big thing. It’s also little things.
Take the auto industry in Brazil, which is one of the strongest in the world. The industry employs 130,000 workers and produces more cars than all but five other countries. Experts forecast Brazilian auto sales will hit 3 million this year, which will represent an all-time record. And as a result, carmakers in Brazil are hiring more workers and expanding facilities even as the industry is on the decline elsewhere in the world. And all because of a growing middle class that is spending more on modern amenities like cars, computers and cell phones.
I am very bullish on Brazil right now—with a few stocks in particular at the top of my list.
First is the Latin American utility Enersis (ENI). As a growing middle class buys more gadgets and consumes more electricity, ENI will see booming growth. Consider that in the first quarter, Enersis’ earnings rose 50.5% to $257 million compared with the same quarter a year ago—even as the rest of the world was reeling from recession.
An even more powerful Brazilian utility is Ultrapar Participacoes (UGP). Utrapar and its subsidiaries distribute liquefied petroleum gas, refine and sell petroleum products and produce chemicals. In the second quarter, the company’s earnings rose 28% compared with the same quarter a year ago. What’s more, the analyst community is forecasting 61.9% earnings growth for 2010 compared with 2009.
These are just some of the breakout Brazilian stocks I am recommending to investors right now. Brazil is the next China, and you need to get in on the ground floor before these stocks skyrocket to record highs. If you were late on the China surge, you can’t afford to miss the Brazil blowout