We are always on the lookout for opportunities around the globe, and today we are going to discuss two companies that fit the bill, both ripe for the picking for active global portfolios.
Here we go:
China Mobile Ltd. ADS
Hong Kong’s China Mobile Ltd. ADS (NYSE:CHL) is the world’s largest telephone company with a whopping 650 million customers and offers the full round of telephone services—local calls, long-distance calls, international calls and data services.
The reason why I’m so excited about this trade right now is that it is actually a defensive play. While turmoil in the economy causes people to curb spending, they won’t stop paying for certain things. In fact, canceling phone service is one of the very last things that newly wealthy Chinese will do if they need to cut back—and it will still give us a way to play the growth story in China’s middle class.
Now, because of the recent concerns regarding China’s economy, investors in China stocks are looking to rotate out of riskier stocks and into more defensive positions—like CHL. For example, when the U.S. and European economies hit a bit of turbulence last year, investors flocked to high-dividend-yielding stocks in defensive industries. I expect a similar rotation to occur if China hits a few more bumps along its high-growth road. Clearly, this is our time to act.
Last year, the company’s sales rose 13% to 185.9 billion yuan compared with 164.1 billion yuan. As I mentioned, the company has 650 million customers, but what’s really amazing is that CHL crossed over one billion mobile phone numbers. By comparison, there are just over 330 million total mobile phone numbers in the U.S.
Core Laboratories N.V.
The Netherlands’ Core Laboratories N.V. (NYSE:CLB) is all about efficiency in the oil industry.
In an environment of falling oil prices, companies can’t afford to waste a drop. CBL’s mission is to help its customers get more oil and gas out of the ground and to help maximize the production life of each well via several different products.
Its best-known product is HTD-Blast, also known as Horizontal Time Delay Ballistic Assisted Sequential Transfer, which has been the fastest-accepted product since the company’s inception. This was used on a full 37.5% of rigs drilling long-reach or extended wells on oil-shale reservoirs last year, and no surprise considering that the technology takes what used to be a 48-hour process and makes it possible in less than an hour.
In addition, the company is also interested in using helium on oil shale plays. This is still in the research phase, but could be a significant method of increasing the recovery factor for the Eagle Ford Shale, and the company has discussed that they are two internal technologies away from turning the idea into reality.
On the back of the company’s solid current results and forward outlook, Core Laboratories has reported strong earnings. In the first quarter, the company’s sales rose 13.3% to $234.2 million compared with $206.7 million in the same quarter a year ago. During the same period, the company’s earnings rose 20.2% to $54 million or $1.13 per share compared with $46 million or 94 cents per share. In the past month, five analysts have revised their consensus earnings estimates higher, which bodes well for Core Laboratories looking forward, despite softening energy prices.