Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger"U.S. Global Investors (Nasdaq: GROW) has been growing its revenue and earnings at an accelerated pace
over the last few years, notes Horacio Marquez, adding "And that pace is about to pick up after a recent mild respite."
The contributing editor to The Money Map explains, "We expect very strong gains in this stock to come in short order." Here, he looks at the fund management firm.
"The reason is very simple. If you couple some of the best minds in emerging-market investments and commodity
investments with a comprehensive quantitative and qualitative approach, you get consistently top-performing
funds with eye-popping returns.
"Last year, four of the firm's equity funds, – representing more than 80% of the money under management –
were among the top performers in the overall U.S. mutual fund universe, in the one- and 10-year time
periods.
"And in the fund-management business, strong, consistent fund performance drives growth in assets under management. And since growth in assets under management drives fees, it is no surprise that this company has
been able to achieve operating income growth rates of between 27% to 94% over the last 10 years.
"In fact, the company should see accelerating earnings growth in the second half, as the interest rates cuts favor higher commodity prices and emerging-market investments – areas in which U.S. Global's funds excel.
"In addition, the huge increase in planned infrastructure build-up in both China and India for 2008 will act
as a strong, long-lived support for these market segments.
"Since U.S. Global Investors enjoys much wider margins and much higher rates of profit growth than its larger
peers, its stock represents at least a 30% discount to the industry. Add to this a 30% higher dividend yield than the industry average (thanks to its recently doubled monthly dividend) and you are getting a real bargain.
"Last, but not least, there is the real possibility that a major firm lacking expertise in global markets might just seek to acquire GROW, for which they should pay a veryhefty premium to current prices. In this regard, some asset-management firms have accumulated some positions, but without manifesting any intention to acquire U.S. Global.
"The bottom line: GROW should be trading at a premium to its competition instead of at a discount, like it is now. And the moment is ripe, given its bargain valuation. In fact, if you look at recent market volatility, the one area that remained very well bid and even rallied was gold, energy, and other commodities.
"So expect to continue to see stellar overperformance of U.S. Global Investors, with surprising asset and fee growth this year. After the recent consolidation, we expect very strong gains in this stock to come in short order. If you haven't already, this is a good time to add to your position."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
