By Paul Goodwin, Editor of Cabot China & Emerging Markets Report
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My stock idea for today is based on the incredible performance of Colombia, the leading emerging market of the past year. Colombia is enjoying the benefits of kicking out the drug lords and getting back to the business of economic growth.
One of the companies that’s enjoying the experience is Bancolombia (CIB), the largest bank in the country. This is no flash-in-the-pan company. Earnings growth has been steady, with gains of 39%, 45%, 31% and 24% in the last four quarters and the company’s after-tax profit margin reached 20.8% in Q3.
The chart for CIB shows a stock that rose strongly in 2009, then put in a five-month base that lasted through May 2010. When the blastoff came in June, the stock raced from 44 on June 1 to 62 in late July. Two bases—three weeks at 64 in September and five weeks at 66 starting on September 28—have set the stock up for further advances.
CIB isn’t going to be a rocket shot. The company pays a 2% dividend and works better as a long-term holding than a trading vehicle. But CIB is a great base holding to underpin the higher volatility picks in your portfolio while providing a little income.
Learn more about Bancolombia and other top emerging markets stocks in Cabot China & Emerging Markets Report by clicking here.
Paul Goodwin
Emerging Markets Specialist, Analyst and Editor of Cabot China & Emerging Markets Report
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and editor of
Cabot China & Emerging Markets Report since 2005. Under Paul’s stewardship, Hulbert Financial Digest rated Cabot China & Emerging Markets Report the number-one-rated newsletter of 2006 with a 78.6% gain for the year, the number-one-rated newsletter of 2007 with a 74.1% return, and the top-performing investment adivsory for five years with a 17.9% annual return.