"[Vinamilk] is run in accordance with all the best standards of corporate governance," he adds. Vinamilk is PXP's biggest holding at one-fifth of the portfolio. The stock has given shareholders 22 times their money since 2005, Snowball says.
Investment in the 38-year-old dairy will surge further if the government finalizes rules letting foreign funds own majority shares in companies on the liquidity-strapped Ho Chi Minh City stock exchange. Today the cap is 49% in most companies.
Will the golden cow tip over by then?
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Vinamilk revenues were projected to rise 17% last year, but profits were anticipated to fall 8% to $284 million, according to the official Viet Nam News
. "Fierce competition" and a drop in "purchasing power" despite aggressive marketing have set back profits, company Chairwoman Mai Kieu Lien said in April, according to the news service.
Vinamilk will still see 6% earnings growth this year and a more "normal" 21% next year, Snowball forecasts.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.