Alright! I believe I got all the right keywords in the title. I have a new stock pick for you.
Billionaire Sebastián Piñera will be the next president of Chile. “The conservative Piñera ran a campaign that promised incentives to re-energize the economy, which is growing at a sluggish 1.4% rate this year” – LA Times
Sebastian is viewed as pro business and whether he can turn the economy into growth or not remains to be seen, but markets trade on expectations so we are likely in for a ride.
Chile is arguably the most stable country in South America. It is ranked number one for it’s region in the international property rights index by the Property Rights Alliance. And Chili has been number one for the region since the Index tracked the country back in 2007.
The recommendation today is to buy the Aberdeen Chile Fund. $CH.
The fund is up about 60% from it’s bottom in 2016, but don’t let that scare you as the fund is still down 60% from it’s 2011 high and it has a lot of room to run.
The last monthly December candle is showing strong support on rising volume after a bit of a correction.
And here is one of the best parts, since the fund is a closed ended fund it can end up trading at a discount to it’s net asset value and indeed that is exactly what is happening.
As I am typing this, the fund stock price $8.98 while the NAV (Net Asset Value) is 10.06. A discount of 11%! Would you trade .89 cents for a $1? I’d take that deal every time.
The fund is also diversified into many industries (you can see here). Chile’s main export is copper and copper prices looked to have bottomed out in 2016. China will likely remain highly dependent on Chile’s copper in the future as well.
If you are feeling the U.S. stock market is a bit expensive then the Aberdeen Fund may just be a great buy for you.
Here are the key points:
- Pro business president just elected
- The fund is in a uptrend but still down 60% from it’s 2011 highs
- The most stable country in South America coming in consistently as #1 for the region in the property rights index.
- The close ended fund is trading at a 11% discount to it’s NAV
- The fund is diversified into different industries in Chile
- Copper prices looked to have made a bottom in 2016 (you can see the fund rising during the same time frame)
- Enables you to diversify out of U.S. stocks
- Oh I almost forgot. Four Aberdeen directors purchased shares just in November. So we have insiders buying. A great sign.
OK, the only thing left is to book a trip to Chile. Sounds fun.
Recommendation: Buy Aberdeen Chile Fund (NYSE American: CH)
Since the market is now closed, I will be adding this to our Tao Stock Tracker tomorrow (12/21). We have a trailing stop loss put in place for 18%.
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