PORTFOLIO UPDATE
angelfire.com
We added CHSE and PURW to our portfolio today. CHSE we like for the long term and PURW we are playing short term. Lots of news on
our stocks:
DHI is not going to be acquiring WBB, at least not in the near future:
biz.yahoo.com
APCO was mentioned in two news releases today. Both have already been mentioned on this thread. The stock closed at a new high.
biz.yahoo.com
biz.yahoo.com
ANTX Homepage can be found at:
www.antexbiologics.com
SRSL seems to have found Wall Street support. We believe that the initial reaction to the acquisition of the Chinese company is being reversed. CHSE was met with a similar initial response. Asian Companies are starting to be concidered undervalued and desirable acquisitions for agressive growth companies as indicated in the following article:
Friday February 27, 11:36 am Eastern Time
TALKING POINT/U.S. firms go on Asia scavenger hunt
By John Hanley
NEW YORK, Feb 27 (Reuters) - Claudio Osorio, chairman of Miami-based CHS Electronics Inc (CHSE - news), visited Asia in November to discover what he called a ''huge opportunity'' among the rubble of Asia's crumbling financial empires.
The 39-year-old Venezuelan, who helped found the wholesale dealer in the mid-1980s, said the prices of some companies had become so cheap once Asia's economic bubble burst, that it was extremely attractive to snap them up.
With about $4.7 billion in revenues, CHS distributes microcomputers and software products to more than 100,000 resellers in 39 countries in Europe, Latin America, Asia and Africa.
''Nothing is deterring us now. We are going all out,'' Osorio said of his company's interest in Asia.
''Asian companies have in some instances been significantly overvalued in the recent past. The latest developments in the region are correcting that, giving rise to some excellent opportunities where price is concerned,'' he said.
Far from the screaming headlines about U.S. exporters getting hit by a regional slowdown, many other U.S. companies -- small and large, from insurance to hotels to power utilities -- see long-term opportunities where others fear risk.
Korea, China, Australia, Malaysia and Thailand top the most attractive list, while Indonesia, for one, has been shunned for the time being because of its political instability, according to economists, industry sources and corporate executives.
Weaker local currencies and depressed asset prices make it attractive for ambitious American companies to gain a foothold in local markets and benefit from any economic recovery.
Asian companies which export out of the region -- and are less vulnerable to an economic slowdown -- and companies which need cash, are most likely to be on the auction block.
U.S. companies, like CHS, are also requiring Asian firms to pay up front or use U.S. dollars, to limit their exposure.
''There's a fire sale on the assets now and this is especially important for firms that are export-oriented, but also is true for firms like utilities,'' said Robert Aliber, a professor of economics and finance at the University of Chicago Graduate School of Business.
Aliber, who went to Asia in December, said many countries will relax their rules on foreign ownership because they are desperate for cash -- a reversal of just a few years ago.
In highlighting the electronics, toys, natural resources and light manufacturing companies, he even compared the opportunities to those in Europe after World War One, when U.S. investors swept up companies at bargain-basement prices.
''In some ways, the Asians tried to keep the gringos out as long as they thought they had cash; they have less cash now, so they need the gringos,'' Aliber said. ''For many companies, this is just a marvelous time to go in.''
LOOKING FOR A TOEHOLD AMONG MAMMOTH OPPORTUNITIES
One utility expanding its Asian horizons is American Electric Power Co Inc (AEP - news). Based in Columbus, Ohio, it is one of the nation's largest utilities, providing energy to 2.9 million customers in seven states.
AEP Resources, a subsidiary, this week announced the opening of a Singapore office to explore acquisitions and alliances, initially in Australia, China, India, Indonesia, Philippines and Thailand.
The unit's president, Donald Clements, said AEP has changed its Asian focus in the last six to 12 months to adapt to the changing economic conditions there, but it had still identified several countries that stood out as rich opportunities.
AEP, with about $6 billion in annual revenues, is already building a power plant in China, which AEP says is committed to meeting its energy demands in the coming years that will require investment from overseas power companies.
''We're still very positive and obviously we're being cautious in keeping an eye on what is going on with the economic issues...but you've got to be in these things for the long term and you can't take react on a six- or 12-month basis,'' he said.
"I think it's a tremendous opportunity," Clements said.
Several leading American firms have already unveiled some eye-popping ventures in recent months.
Insurance giant American International Group Inc (AIG) (AIG - news), which earns more than half its $3.33 billion in annual income from outside the United States, announced a $1.5 billion infrastructure fund for investment in the region.
Then, earlier this month, Chief Executive Maurice Greenberg said AIG would separately head a proposed $1 billion fund to help Southeast Asian economies recover.
Patriot American Hospitality Inc (PAH - news), the nation's second-largest Real Estate Investment Trust (REIT), said this month it was increasingly interested in taking ownership of Asian debt, wherever the underlying properties may be located.
In other words, Patriot American could acquire properties located in the United States or Latin America, to mention possible examples, that are owned by Asian debtors.
And Merrill Lynch and Co Inc (MER - news) hired some 2,000 former employees of failed Japanese broker Yamaichi Securities Co Ltd, to help it start a retail brokerage in Japan.
Elsewhere, U.S. semiconductor and semiconductor equipment companies, including Intel Corp (INTC - news), have expressed interest in bailing out Korean chip makers, of which the three leading giants produce 35 percent of the world's memory chips. The three bought about $5 billion of equipment last year.
Rounding out the corporate hunt, the three big U.S. automakers, Ford Motor Co (F - news), Chrysler Corp (C - news) and General Motors Corp (GM - news), have said they were looking to increase their Asian investment if it made economic sense.
''When the crisis settles down and Asia gets back on track, these (types of) companies will be better positioned to reap the benefits of a hopefully once-again healthy economy,'' said Arun Kumar, senior U.S. equities strategist at Lehman Brothers.
''As long as you can buy them and establish a presence, its a cheap way,'' he said. ''It's just a question of waiting for the rebound to come.''
STARVING FOR INVESTMENT AND AUTOMATION
U.S. officials said it is difficult to give timely data on direct investment in Asia, but it appears that companies are still keenly interested, especially projects backed by the World Bank.
A spokeswoman for the World Bank, which acts as a conduit between public projects and private investment, said there had been no slowdown in queries from consultants, manufacturers, engineers and service providers, on its projects.
''We are getting calls from consultants who want to bid on projects throughout Asia,'' she said. ''There has been no slowdown, that is something I can definitely say; if anything, it's been a little out of control.''
''And the really interesting thing is that it's not just U.S. companies, it's European companies as well,'' she said.
Osorio, of CHS Electronics, said the company's revenues from Asia would rise from about $100 million, or two percent of total revenues, at the end of 1997, to about $800 million, or eight percent, by the end of 1998. His target by 2000 is 20 percent.
CHS this week said it would buy an 80 percent stake in the Hong Kong, Malaysia and Singapore subsidiaries of SIS Distribution Ltd, a Hong-Kong based distributor of microcomputer products. CHS is paying $28 million in cash and $42 million one year later in cash or shares at CHS's option.
Asked how the computer industry could survive an economic slowdown in Asia, he said that information technology, whose costs have come down significantly in recent years, was still vital for struggling Asian companies.
''High tech is the bridge for many of these countries to overcome their structural shortages,'' he said. ''Almost every company or institution is starving for automation.'' |
