10 Best Stocks for 2014: #5, MTN Group (MTNOY)
Investor: Charles Sizemore
YTD Return: +1%
This year has been a rough one for emerging markets. First, there was the “mini-crisis” in the Argentine peso and waves of protests sweeping Venezuela. Then, there was the Ukraine political crisis that resulted in Russia effectively stealing the Crimean peninsula … and fears that China is about to have its own 2008-style financial crisis.
So the 1% gain year-to-date put up by Charles Sizemore, editor of Macro Trend Investor, with his South African telecom play MTN Group (MTNOY) is actually much more impressive than the modest profit reflects.
After all, many emerging-market equities are deeply in the red so far this year.
But Charles remains very bullish on MTN specifically and emerging markets broadly in the latter part of 2014. He says in a recent update that “the selling simply exhausted itself and that the bad news has already been priced in.” And as for MTN Group…
- It’s the dominant mobile provider in the last great frontier market: Africa.
- It provides a service that is essential to the lives of the new African middle classes.
- Its markets are far from saturated, and it has virtually unlimited growth potential due to the inevitable shift to smartphones and higher-margin data plans
- It’s very reasonably priced at a forward P/E of 14 and pays a high and growing dividend that yields 4.8% right now.