12 Growth Stars Shine in Foreign Lands

3. Global economic growth creates a new demand for technology products in both the developed and developing worlds as global manufacturing lowers technology prices.

Canon(CAJ). The Japanese company is riding strong growth in unit demand for its laser printers and digital cameras. Unlike many technology companies, Canon looks like it will be able to keep its profit margins steady, thanks to recent moves to cut costs by moving manufacturing from its home base in Japan to low-cost countries such as China and Vietnam. Sluggish Japanese equity markets have made Canon relatively cheap with a 12-month-trailing price-to-earnings ratio of just 14. The consensus projection calls for long-term earnings growth of 17% annually.

AU Optronics(AUO). Despite rising unit sales of LCD screens, this Taiwan-based company has been socked by falling prices. But supply and price seem likely to stabilize in 2005. On Jan. 31, its shares were upgraded to buy from hold by Deutsche Bank Asia.

Tata Consultancy Services. The oldest and largest software exporter in India, this company's revenue is about 50% greater than that of No. 2 Infosys Technologies(INFY). General Electric(GE), at 15% of overseas sales, is the company's biggest foreign customer. Shares listed on the Bombay stock exchange (ticker: 532540.BY) in August 2004.

4. High rates of economic growth create new demand for infrastructure and raw materials, while limits on supply, even if temporary, drive up prices for commodities.

Cleveland-Cliffs(CLF). This North American producer of iron-ore pellets is going to Asia where the customers are. The company has made a friendly bid on Australian iron-ore miner Portman Ltd. The deal would add about 8 million tons of iron a year to Cleveland-Cliffs' output. The stock trades at a trailing 12-month P/E of 13.8.

Siam Cement. Thailand's dominant industrial conglomerate, which trades under the symbol SCC in Thailand, has plans to become the dominant industrial conglomerate in the Southeast Asian region by continuing its drive to expand from cement into chemicals and paper. There's plenty of cash, too: Net profit climbed by about 80% in 2004.

Talisman Energy(TLM). It's where Talisman's oil and gas are that makes this an attractive global play. With major fields in Southeast Asia and new projects coming into production in Indonesia, Talisman is right next door to the fastest-growing energy markets. Both China and India are on the prowl for resources, and Talisman would make a tasty bite.

I obviously haven't been able to do justice to these 12 stocks in one column. (That's the polite way to say, "You need to have your head examined if you buy any of these without doing your own due diligence.") But I hope I've jump-started a little consideration of something besides the usual suspects when the discussion turns to global investing.

I'll be tracking this portfolio, reporting on its gains or losses, and adding to it in the coming months. If you have a suggestion for a stealth global winner, please don't be shy about emailing me with your suggestions.

Eleven Winners Jim Jubak's stealth blue chips
Stock	Recommended	Price	Feb. 4 Close	Gain
Affiliated Computer Services (ACS:NYSE)	10/14/2003	$49.90	$53.42	7.10%
Applebee's International (APPB:Nasdaq)	10/14/2003	22.73	28.33	24.6
Brown & Brown (BRO:NYSE)	7/21/2004	42.35	43.98	3.8
Chico's FAS (CHS:NYSE)	10/14/2003	36.9	52.1	41.2
CUNO (CUNO:Nasdaq)	7/21/2004	51.53	57.85	12.3
Donaldson (DCI:NYSE)	10/14/2003	28.6	31.84	11.3
Expeditors International (EXPD:Nasdaq)	10/14/2003	37.18	56.31	51.5
Kinder Morgan Energy Partners (KMP:NYSE)	10/14/2003	44.17	45.37	2.7
Main Street Banks (MSBK:Nasdaq)	10/14/2003	25.98	32.23	24.1
Penn National Gaming (PENN:Nasdaq)	7/21/2004	33.14	68.89	107.9
SCP Pool (POOL:Nasdaq)	10/14/2003	20.4	31.28	53.3
Portfolio average gain				30.90%
S&P 500 gain, 10/14/03-2/4/05				15
S&P 500 gain, 7/21/04-2/4/05				10
Nasdaq Composite gain, 10/14/03-2/4/05				7
Nasdaq Composite gain, 7/21/04-2/4/05				11
Source: MSN Money

Changes to Jubak's Picks

Buy Talisman Energy. The company has grown oil and gas production about 15% annually since 1993. I think there's a good chance that the company will manage to grow production by 10% or slightly better annually through 2008. At a time when it's very hard to grow production at all in the oil and gas industry, that's a good enough story to make this a buy in Jubak's Picks. I'm adding Talisman Energy to Jubak's Picks with a January 2006 target price of $39. (Full disclosure: I own shares of Talisman Energy.)

>To order reprints of this article, click here: Reprints