Boston Consulting Group -- The African Challengers -- How to buy them

On of the hottest reports quoted on the Internet last week was the report called The African Challengers: Global Competitors Emerge for the Overlooked Continent by the Boston Consulting Group.

Why would you want to invest in Africa? Here are some points they make about Africa:

• With just 4% of global GDP they have 20% of the world's land and 15% of it's population
• Between 2000 and 2008 Africa's GDP grew 5.3% annually but the global GDP only grew 4% for the same time frame
• In 2009 Africa's GDP grew 2% -- US dropped 4%, EU dropped 2.8%, Latin America dropped 1.5%
• These companies do business not only in their own country but in the rest of Africa and around the world as well
• The companies mentioned in their survey far outstripped the rest of the world in increased sales and earnings growth

The best evidence of promise is in the return on investment for investors. If in November 2000 you would have made a $100 investment In the African Challengers 40 by November 2009 your annual rate of return and investment would be:

• African Challengers -- 24.8% annual return for $900
• MSCI Emerging Markets -- 11.8% annual return for $303
• S&P 500 -- negative 0.8% annually for $92

They looked at all the companies in the African continent and boiled the list of 600 possible companies down to the 40 they think might be worthy of investment. Not all can be purchased in the US but I managed to track down 14 that trade in the US as either ADR's or on the exchanges. Here is the list:

AAUKY -- Anglo American
APNHY -- Aspen Pharma
BRRAY -- Barloworld Ltd
CIBEY -- Commercial Int'l Bank
IHLDY -- Imperial Holdings
MTNOY -- Mountain Group LTD
MURZY -- Murray & Roberts
NPSNY -- Naspers LTD
ODMTY -- Old Mutual
SBGOY -- Standard Ban Group
SBMRY -- SAB Miller
SNHFY -- Steinhoff International
SPP -- Sappi Ltd
SRHGY -- Shoprite Holdings

Before you consider adding any of these to your portfolio do your complete due diligence like you would with any other stock.

Jim Van Meerten is an investor who writes on investing here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No positions in any of the stocks mentioned in this article at the time of publication.

More than BP tanked this week

Each weekend I forget about all the contradicting talking heads and headlines and look back at my 3 yardsticks of the market to let the numbers not the opinions and prejudices of others tell me what really happened. I use 3 yardsticks for 2 reasons. First, each measures the market in a similar but different way. I want to know the percentage and direction of the market's movement. I want to know how much of the market was involved in that movement. And lastly are we at new tops or new bottoms or just solidly in the middle of a reversal? The second reason I use 3 is in my awe of the wisdom of the Supreme Court. 3 is an odd number so you never have a tie. All my data can be duplicated from Barchart if you'd like to run the numbers yourself during the week.

Value Line Index -- I like this Index better than the S&P 500 or the much narrower Dow 30 because it contains 1700 stocks so it gives me a better feel of the overall market and not just the large caps -- This week the Index is down

• For the week the Index lost 3.58%
• The Index was down 3 days up only 2 days
• The Index was down 3 weeks up only 2 weeks
• The Index was up 3 months down 2 months
• If the Index was an individual stock it has a Barchart technical rating of 64% sell
• 2 buys, 1 hold and 10 sells on Barchart's 13 technical indicators
• Friday the Index closed below its 20, 50 & 100 day moving average

Barchart Market Momentum -- The percentage of stocks trading above their Daily Moving Averages for various time frames -- above 50% is bullish, 50% is neutral , below 50% is a bear trend -- This week we are in a bear trend

• 20 DMA -- Friday only 23.44% closed above -- Last week 30.97% closed above -- Last Month 32.99% closed above
• 50 DMA -- Friday only 30.97% closed above -- Last week 27.13% closed above -- Last month 46.43% closed above
• 100 DMA -- Friday only 15.44% closed above -- Last week 31.70% closed above -- Last month 52.20% closed above

Ratio of stocks hitting new highs to stocks hitting new lows for various time frames -- 1.0+ bullish, 1.0 neutral, under .99 bullish -- No good news here -- Many more new lows than new highs

• 1 month new highs/new lows -- 219/827 = .26
• 3 month new highs/new lows -- 107/622 = .17
• 6 month new highs/new lows -- 88/316 = .28

Summary and Investment Strategy -- The market is definitely in a downward trend. Here's my advice:

• If you are young and between the ages of 21 - 45 dollar cost average into any downward market. Throw all the money you can into your 401K and Roth IRA. The market will be different before you retire and start dipping into your retirement funds
• If you are middle aged and between 45 - 65 -- depending on where you are between those 2 numbers you should transfer your assets to cash ( 401K and IRA money so it's not a taxable event) and let your assets sit on the sidelines till a recovery occurs but dollar cost average into the market with your new money additions to your retirement accounts.
• If you are 65 and older you should be in a very conservative position. Protection of your assets is the most important factor. If you are actively trading your retirement assets you need to trim off any investments trading below their 50 DMA and if you are a more long term investor maybe the 100 DMA is a better stop loss for you. If living off dividends this might be a time to buy on the dip some stocks with a superior strength and dividend record. As always when buying dividends make sure that the company's' earnings forecasts cover the dividend and project increased earnings so that dividends will increase in the future.

Jim Van Meerten is an investor who writes on investing matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

A Diamond in the rough - Diamond Management

On Financial Tides we've covered this stock before but Diamond Management and Technology Consultants ( DTPI ) just keeps popping up on my new high list. They are a global management consulting firm that helps leading organizations develop and implement growth strategies, improve operations, and capitalize on technology. Mobilizing multidisciplinary teams from highly skilled strategy, technology, and operations professionals worldwide. Diamond works collaboratively with clients, unleashing the power within their own organizations to achieve sustainable business advantage. They are headquartered in Chicago, with offices across Europe, North America, and South America.

The recent and consistent price momentum deserves a new look. The stock continued to hit 12 new highs in the last 20 trading sessions including 4 in the last 5 days. The stock appreciated 21.05% compared to a loss in the Value Line Index of 8.54%. I use the Value Line Index as my benchmark because it contains 1700 stocks making it broader than the S&P 500 or much narrower Dow 30. Barchart's technical indicators have 12 buy signals out of a possible 13 giving this stock a 96% technical buy score. It trades around 10.40 with a 50 day moving average of 8.73.

Price movement without increases in sales and earnings is meaningless and Wall Street analysts think the company will increase sales 22.40% this year and 12.90% next year. Increases in earnings per share are also forecasted to be a 22.70% increase this year, 22.20% next year and 17.50% a year for the next 5 years. I like double digit estimates of sales and earnings increases. Wall Street has published 4 strong buy recommendations.

The stock has a very positive following on Motley Fool with the CAPS members voting that the stock will beat the market 149 to 4. The more experienced All Stars agree 53 to 1.

This stock continues to ring my bell and I still think it's not too late to get in. The positive points are:

• Recent and consistent upward price appreciation
• Barchart technical buy signal of 96%
• Wall Street forecasting double digit increases in sales and earnings
• A very positive investor sentiment

Jim Van Meerten is an investor who writes on financial matters on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No position in DTPI at the time of publication

Consumers will use cards

Financial Tides likes Hypercom Corp. ( HYC) a global provider of electronic payment solutions, including multi-function point-of-sale terminals, peripherals, network products, Ascendent payment and transaction software and Internet-based and electronic commerce payment solutions. On a global basis Hypercom delivers the services and technology infrastructure required to quickly integrate and deploy new payment applications. These applications provide competitive value-added programs, improved business performance and low total cost of ownership.

All signs are ripe that the economy is in recovery and there is a lot of pent up consumers consumption about to explode both here and abroad. In this new economy cash and checks are no longer king. Purchases of all sizes will be made on cards: debit or credit - it doesn't matter Hypercom will be properly positioned to take advantage of it.

Wall Street has noticed this stock and has 4 buy reports recently published. Although sales are expected to increase only 9.70% this year and 8.60% next year; Wall Street thinks earnings are the story. They estimate an increase in EPS of 113.30% this year, 43.80% next year and a 5 year compounded EPS growth rate of 28.00%. I like these numbers too.

Recent price appreciation is reflected in Barchart's technical buy signal of 100% -- all 13 of Barchart's technical indicators are on green. The stock has appreciated 22.56% in the last month and hit 13 new highs in the last 20 trading sessions. The stock is trading above its 20, 50 & 100 day moving average. It trades around 5.09 with a 50 day moving average of 4.25.

Investor sentiment as measured on Motley Fool is positive with the CAPS members voting the stock will beat the market by a vote of 91 to 15 with the more experienced All Stars agreeing 30 to 2. Fool notes that of the Wall Street columnist they follow all 3 articles have been positive.

If you think the economy will benefit from a need to spend again here are this stocks points:

• Recent and consistent price appreciation
• 100% Barchart technical buy signal
• Positive investor sentiment
• Buy recommendations from Wall Street based on increases in sales and earnings

Jim Van Meerten is an investor who writes on financial matters on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com.

Disclosure: No positions in HYC at the time of publication

Citi - C - A study of herd mentality

Citigroup Inc., ( C ) has some two hundred million customer accounts and does business in more than hundred countries, providing consumers, corporations, governments, and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, and Banamex. Are they a case of too big to fail?

Sometimes the herd just loses it's way. Every day Citi ( C ) seems to be on the top or near the top of the highest volume list. On certain days over a billion shares have traded hands. Wall Street has 8 buy, 10 hold and only 3 sell or under perform recommendations published.

Next year, the same Wall Street analysts that are recommending a buy are saying that the stock will lose .30% in earning per share and they predict that the stock will continue a 5 year downward EPS "growth" of an 8.00% loss for at least 5 years. How can this be??

Herd mentality over on Motley Fool is just as bad with the CAPS members praying that the stock will beat the market by a vote of 8580 to 1703 with the All Stars in the same pew with a vote of 1570 to 313.

Technical price action hasn't been there with the stock losing 34.88% in price in just the last month. The stock hit 11 new lows in the last 20 sessions and 3 lows out of the last 5 days. Barchart shows a technical sell signal on 6 of it's 13 technical indicators for a 24% sell signal.

Folks, let's look at the facts. Obama still own 27% of this company and will slowly sell his share and for public relations reasons that will always be done at a price higher than he paid. This selling will dilute the upward potential for awhile.

There are still a lot of bad assets on the books that need to unwind that will drive down EPS for quite some time.

If I gave you a stock to buy with the following points to consider what would you do?

• The company almost went bankrupt by giving out loans with very sloppy underwriting
• They still have a lot of garbage on the balance sheet that will be written off against future earnings
• The largest stockholder who owns 27% of the outstanding shares has publicly announced he wants out but will sell only at a price higher than his acquisition price
• The company is expected by Wall Street analysts to have a negative earnings growth for the next 5 years.
• Big money, hedge funds and programmed trading groups are churning this stock on a daily basis for short term trading profits so if you buy you'd better think you can out smart the big guns
• Even though the stock is selling for only 7% of its previous high there is still normally a short interest of around 500,000,000 shares a day.

And those are the good points about this stock!

For the average investor I'd recommend you pass on putting Citi ( C ) on your buy list. There are just too many other worthy stocks out there. I think that this stock is just one of those double down plays you should stay away from and is not a sound investment.

Please follow these rules and you won't go wrong:

• Look for consistient and recent upward price action
• Make sure Wall Street is recommending the stock based on expected increases in sales and earnings
• If there is positive investor sentiment is it based on an improving future for the company
• Let your winners run their course and cull out your losers while you still have most of your capital left

Remember: A fool and his money are soon parted and a lot of poeple want your money.

Jim Van Meerten is an investor who writes on investing on Financial Tides. Please leave a comment below oir email JimVanMeerten@gmail.com

Disclosure: No positions - long or short in Citi at the time of publication

Should BP be nationalized?

Whoa! Before you all jump on me for being some kind of a socialist mole in this capitalist economy hear me out.

When I was back in law school one of the biggest concepts we discussed was how the sentencing should fit the crime or tort. The old "What would God do ?" argument.God would turn back time and make it so the victims would forget the pain and they would be back exactly in the position they were before the incident and the perpetrator would be appropriately punished and could never do that dastardly deed again.

Courts can't do that. They can only restrict the offenders freedom with jail time and award the victims money damages. The pain and loss is still there and there is almost no way the court can make sure it will never happen again.

Was this oil spill an accident? If your definition of an accident is something that was unforeseeable and unavoidable then a big NO! Every environmental group warned that there would be an off shore oil rig spill so the unforeseeable excuse is out the window. Was it unavoidable? Another big NO! They will have to prove how they will avoid the same occurrence in the future or they'll never be allowed to drill another off shore well.

I watched the Washington hearings and heard BP ( BP) , Halliburton ( HAL ) and Transocean (RIG ) management not take responsibility and blame it on each other. It was almost like listening to recordings of the Nuremberg Trial after WWII. " I was just a lowly soldier following orders". Just more choruses of the " I was not a Nazi Polka".

I've read where business in the Gulf region is down 30%. Who will pay the waitresses who will be taking home 30% less tips. Who will pay the maids working in the small hotels and motels when 30% of them are laid off. Who will pay the small business owner whose receipts are 30% less?

I live all the way in Charlotte and read that seafood prices even in our region have sky rocketed. Who will pay the owners of every seafood restaurant across the country who will see their profit margin squeezed because their costs are rising but they can't raise prices to offset it. Who will pay me and you, the patrons of seafood restaurants who raised their prices?

This oil spill is not just an environmental disaster but an economic disaster as well that has ripple effects all across out country and even the world. If we wait months and years for all this to go through the court system can you see all the little people who will lose money but not be reimbursed a dime?

Who got rich because of all the shortcuts taken? The Board, Management and Stockholders of BP, Halliburton and Transocean. Who are the ones who are paying for their greedy mistakes: the little people get kicked in the butt again. How can you punish the Board, Management and stockholders of the 3 horsemen of destruction?

All the courts can do is restrict the freedom and punish with monetary fines. That leaves jail time of the Board, Management and loss of your investment for the stockholders.Who will help the waitresses, maids and small business owners pay their bills next month? Not the Board, Management and stockholders of BP, Halliburton and Transocean.

You are the judge and jury. You see the crime unfold daily on TV. You see and feel the pain of the countless victims across the country. What do you think the punishment should be?

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: I hold no positions in BP, HAL or RIG at the time of publication

Should BP be nationalized?

Whoa! Before you all jump on me for being some kind of a socialist mole in this capitalist economy hear me out.

When I was back in law school one of the biggest concepts we discussed was how the sentencing should fit the crime or tort. The old "What would God do ?" argument.God would turn back time and make it so the victims would forget the pain and they would be back exactly in the position they were before the incident and the perpetrator would be appropriately punished and could never do that dastardly deed again.

Courts can't do that. They can only restrict the offenders freedom with jail time and award the victims money damages. The pain and loss is still there and there is almost no way the court can make sure it will never happen again.

Was this oil spill an accident? If your definition of an accident is something that was unforeseeable and unavoidable then a big NO! Every environmental group warned that there would be an off shore oil rig spill so the unforeseeable excuse is out the window. Was it unavoidable? Another big NO! They will have to prove how they will avoid the same occurrence in the future or they'll never be allowed to drill another off shore well.

I watched the Washington hearings and heard BP ( BP) , Halliburton ( HAL ) and Transocean (RIG ) management not take responsibility and blame it on each other. It was almost like listening to recordings of the Nuremberg Trial after WWII. " I was just a lowly soldier following orders". Just more choruses of the " I was not a Nazi Polka".

I've read where business in the Gulf region is down 30%. Who will pay the waitresses who will be taking home 30% less tips. Who will pay the maids working in the small hotels and motels when 30% of them are laid off. Who will pay the small business owner whose receipts are 30% less?

I live all the way in Charlotte and read that seafood prices even in our region have sky rocketed. Who will pay the owners of every seafood restaurant across the country who will see their profit margin squeezed because their costs are rising but they can't raise prices to offset it. Who will pay me and you, the patrons of seafood restaurants who raised their prices?

This oil spill is not just an environmental disaster but an economic disaster as well that has ripple effects all across out country and even the world. If we wait months and years for all this to go through the court system can you see all the little people who will lose money but not be reimbursed a dime?

Who got rich because of all the shortcuts taken? The Board, Management and Stockholders of BP, Halliburton and Transocean. Who are the ones who are paying for their greedy mistakes: the little people get kicked in the butt again. How can you punish the Board, Management and stockholders of the 3 horsemen of destruction?

All the courts can do is restrict the freedom and punish with monetary fines. That leaves jail time of the Board, Management and loss of your investment for the stockholders.Who will help the waitresses, maids and small business owners pay their bills next month? Not the Board, Management and stockholders of BP, Halliburton and Transocean.

You are the judge and jury. You see the crime unfold daily on TV. You see and feel the pain of the countless victims across the country. What do you think the punishment should be?

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: I hold no positions in BP, HAL or RIG at the time of publication