“If you buy only one of the three safest stocks in the world, make it this one.”
How’s that for an intro? In a tumultuous market, who could possibly turn away without reading the ad?
The ad this time is from Richard Band, pitching his Profitable Investing newsletter — he tells us that he’s got a free report called “The Swiss Savior and Two Other Global Giants” ready for us right, now all set to make us rich while others falter.
Except, dangit, his “free” means “free if you spend 100 clams to subscribe to my newsletter.” So we’re going to dig into it, Gumshoe-style, and see if we can identify the picks for you in a way that’s quite a bit more, well, free-ish.
First, the clues:
“Each year, Walmart kisses off 10,000 companies begging for shelf space. But the king of retail kisses the ring of my top recommendation.
“Walmart knows it as The Swiss Savior. I see it as a perfect way for you to save your future. Seriously. This giant…
- Since March 3, 2011, blew past Walmart itself and 10 other top 25 global giants
- Is now bigger — and safer — than global giants Microsoft, Johnson & Johnson, IBM, Procter & Gamble, Chevron, the list goes on
- Owns a 15-year streak of increasing dividends — a streak that won’t stop even if economies collapse
- Is looking at a 20% to 30% earnings surge through 2012 no matter what happens
He gives some more clues, but the thing that stands out for me is that “earnings surge through 2012 no matter what happens.” Huh? If true, that’s pretty impressive, especially given the wildly unpredictable events that we’ve seen in the past five years.
So what does he mean by that? Turns out, it’s all about currency …
“On September 6, the Swiss, fed up with investors buying the Swiss franc to escape uncertainty and unrelenting volatility caused by the euro debt crisis and America’s zero-growth economy, dropped a bomb.
“The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development.”
“After issuing that warning shot, The Swiss National Bank shocked markets by deploying what I call The Swiss Nuclear Option. And within 15 minutes…
“The franc fell against the euro
“It lost 9% against the U.S. dollar
“And it fell at least 8.2% against all 16 of the most active currencies in the world.
“The Swiss franc’s value is now capped. What does this mean to investors like us? It means all exporting companies based in Switzerland, including The Swiss Savior, get even more profitable, overnight!
“The Swiss Savior gets an instant 20% to 30% earnings boost this year and into 2012.”
So that’s what they mean — not that the business is guaranteed to improve by 20-30% next year on any kind of fundamental basis, but that the impact of being an exporter from a country with a lower currency will make the results look at least that much better when they report.
Which, frankly, would just be the flip side of how much worse the strong Swiss Franc made the numbers for this company look earlier this year — and the stock?
This is a company you’ve certainly heard of, Nestle (NSRGY for the ADR), global titan of chocolate and baby formula and hundreds of other food and nutrition products.
And yes, while they aren’t listed here in the US directly there is plenty of volume in the pink sheets ADR shares of Nestle to keep US investors satisfied — and, of course, you get the dividend no matter where you trade the stock. The current yield is about 3.7%, and it has indeed been rising every year for 15 years.
If you’d like to see the basic info about Nestle, the sites like Yahoo Finance don’t necessarily get great data for pink sheets ADR shares, but you can always go straight to the horse’s mouth — they have an investor-friendly website with their recent presentations and releases if you’d like to dig in.
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