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SNAG BIG RETURNS WITH THESE TOP GLOBAL PICKS

Whether your car comes from Japan, your smartphone comes from South Korea, your bottled water comes from France, or in many cases, all of the above, there is no doubt that our lives are heavily influenced by a global economy on a daily basis. However, this international influence doesn’t always translate over into a large number of investment portfolios.

There are countless factors that play into an investor’s decision not to venture too far outside of the US for their investments, like the particular risks involved with foreign investing, such as political and currency risk. For many US-centric investors, another reason for avoiding global diversification is the fear of the unknown. This is why we’ve asked the Nation’s most respected and well-known newsletter advisors to offer their top global picks to assist you.

As always, we caution you to use these ideas only as a starting place for your own research and only buy stocks that meet your own personal investing criteria, your risk parameters, and your time horizon.

Importantly, these global picks represent each advisor’s current outlook. As fundamentals change during the rest of the year, a favorite “buy” can become a “sell.” As such, it is up to each investor to monitor future developments at these stocks to be sure that the reasons behind buying them remain in place.

We would also emphasize that no one advisor is always right and there is no guarantee that any individual recommendation will succeed; you can also minimize your risks by considering the global stocks featured in this report for only a portion of your overall portfolio.

We would also point out that investing in global securities can add currency risk to your portfolio and some securities receive different treatment for tax purposes. As always, when considering these securities, consult with your own tax advisor or financial expert.

We also encourage you to visit MoneyShow.com on a regular basis. Everyday, we feature new investment ideas from the top advisors. There’s no better way to follow the ongoing advice and favorite stocks from the very best investment newsletter advisors.

We wish you the very best for your investing for the rest of 2015.

Steven Halpern Editor, Top Pros’ Top Picks

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Contents Click on page numbers to go directly to each article

A Trio of Global ETFs: Alpine Global Premier Property, Mexico Fund, and GAMCO Global Gold & Natural Resource Fund 4By Briton Ryle

Aberdeen: Diversified Income from Asia-Pacific 5By David Dittman

Asian Favorites: China, Taiwain, and South Korea—EWT, DBKO, SHG, SKM 6By Yiannis Mostrous

Causeway: Three Roads to Global Gains 7By Mark Salzinger

Emerging Markets: 4 Fallen Angels—EWZ, EPHE, RSX, NGE 8By Jim Powell

Europe: Ready for a Revival? Causeway International Value and Vanguard European Stock IndexBy Benjamin Shepherd 9

Global Yields and Diverse Dividends: Arrow Dow Jones Global Yield ETF 10By Doug Fabian

Hop Aboard Canadian National 11By Ingrid Hendershot

IDT: Hotline to Havana 12By Nicholas Hodge

India and Infrastructure: ICICI, EGShares India Infrastructure ETF 13By Christian DeHaemer

Invest in Spanish-Language Media: Grupo Televisa 14By Stephen Leeb

Mallenox: Israeli Cloud Play 15By Nicolas Vardy

Morningstar Eyes Foreign, Large-Cap Value: CIVVX, TBGVX, VTRIX 16By Russel Kinnel

New Era for Global Banking: HSBC, SAN, WBK, BBD 17By Richard Stavros

Pakistan: An Exotic Speculation—Global X MSCI Pakistan ETF 18By Vivian Lewis

PIMCO Income: Multi-Sector Winner 19By Walter Frank

Renren: Secret Way into IPOs 20By Ian Wyatt

Ricoh: Printers and Profits 21By Jim Pearce

Suez Environnement: Opportunities in Water 22By Roger Conrad

TAL Education: Education in China 23By Paul Goodwin

Top Bet on Bottled Water: Danone, Nestle SA, Coca-Cola, and Pepsi 24By Tony Daltorio

Top-Ranked in Emerging Bonds: T. Rowe Price Emerging Markets Bond Fund 25By Todd Rosenbluth

Volkswagen Group: More Than VWs 26By Tyler Laundon

WestJet: Canadian Airline Flies High 27By J. Royden Ward

Yaskawa Electric: World Leader in Robotics 28By Martin Hutchinson

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A TRIO OF GLOBAL ETFS: ALPINE GLOBAL PREMIER PROPERTY, MEXICO FUND, AND GAMCO GLOBAL GOLD & NATURAL RESOURCE FUND

Alpine Global Premier Property (AWP)This fund gives us exposure to the US and Brazilian real estate markets. These two countries account for 49% of the fund’s $763 million in assets. It currently pays about 9% in monthly installments of $0.05.

The discount to NAV is 12.68%. That’s a relatively large discount for this fund, which suggests it’s cheap at current levels.

We rate the Alpine Global Premier Property Fund a strong buy at current levels. Our price target is $11.

Mexico Fund (MXF)Mexico is the best emerging market for investment, in our opinion. Its proximity to the US puts it in a strong position. The US takes in 78% of Mexico’s exports.

GDP should grow 4% in 2014 (compared to 2.7% for Brazil, for instance) and public debt is just 35% of GDP. The current NAV for the Mexico Fund has risen to $22. The 52-week high NAV for the shares was $29.

The shares now trade at a 3% discount to NAV. The potential upside makes them attractive. This fund also pays a healthy 10% dividend.

GAMCO Global Gold & Natural Resource Fund (GGN)The GAMCO Global Gold, Natural Resources & Income Trust is a closed-end gold fund run by Mario Gabelli’s funds company. It’s a leveraged fund, which means it trades derivatives to generate income, which it then distributes as a very nice dividend.

This fund’s holdings are a Who’s Who of gold miners. This fund now trades at a slight discount to its net asset value and the dividend is 12%.

This fund is the very epitome of beaten down and will be quite attractive if gold stocks ever get a bid. It won’t take a big move for gold prices to make the miners irresistibly cheap.

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By Briton RyleEditor

The Wealth Advisory

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ABERDEEN: DIVERSIFIED INCOME FROM ASIA-PACIFIC

The size of the Asian local currency market has grown from $1.5 trillion a decade ago to more than $8 trillion now; nonetheless, few funds let individuals invest in bonds issued in the Asia-Pacific region.

Enter Conservative holding Aberdeen Asia-Pacific Income Fund (FAX), the only vehicle of its kind that lets US-based investors tap into developing Asia’s debt markets, as well as Australia’s.

This closed-end fund is tightly tied to the Australian dollar and Asia-Pacific growth and it’s been a tough road on both of those counts. But at its current level, the fund offers both good value and an impressive 7.7% yield.

The fund gives you exposure to bonds from Australian, Chinese, South Korean, and Singaporean governments and corporations, as well as fixed-income securities from countries such as Indonesia, India, Thailand, the Philippines, and Malaysia.

Aberdeen Asia-Pacific Income’s foreign currency exposure makes it a compelling option for income investors looking for some protection from an eventual downturn in the US dollar.

Meanwhile, longer-term factors point to plenty of upside from here. For one, Asia’s fundamentals remain robust, with rising incomes and a growing middle class.

In addition, continued economic reforms reinforce the appeal of Asian fixed income for diversification within a global portfolio.

China is the region’s wildcard, as it is shifting away from an export-led growth model to one built around domestic demand. As a result, China’s growth is slowing and will continue to moderate as this transition continues.

But the upside is that it’s helping create bargains for investors and it will pay off with longer-term stability.

The appeal of Asian fixed income—such as robust fundamentals, economic reforms, and geographic diversification—is backed up by diversity within the region itself.

That’s a key takeaway: By focusing on just one, two, or a handful of Asian countries, you’re robbing yourself of the benefits of that diversity.

Luckily for investors, this is where the Aberdeen Asia-Pacific Income Fund shines. Aberdeen Asia-Pacific Income Fund is a relatively safe way to establish broad regional diversification.

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By David DittmanEditor

Pacific Wealth

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ASIAN FAVORITES: CHINA, TAIWAIN, AND SOUTH KOREA—EWT, DBKO, SHG, SKM

Whereas US equities have surpassed their 2007 high by more than 30%, the Chinese market still trades about 20% below its high.

In the Chinese market, investors should focus on the banks, brokerages, insurers, and real estate companies. Bank stocks look particularly appealing and still trade at roughly book value, despite the recent rally.

US-based investors can gain exposure to this trend via Global X China Financials (CHIX), an ETF that offers diversified exposure to China’s financial sector. Buy Global X Financials up to $24 per share.

China Construction Bank (939:HK) remains our top pick for investors who can purchase the local shares.

Despite its recent run-up, an inexpensive valuation and an influx of liquidity to the Chinese equity market could drive further upside.

Banks should also continue to benefit from recent financial reforms enacted in Beijing. With an almost 5% dividend yield, China Construction Bank Corp’s local shares remain a buy up to HK$8.50.

The liquidity sloshing around China’s equity market is also moving into neighboring countries. Taiwan’s equity market should benefit from growing Chinese investment in equities; US-based investors should buy iShares MSCI Taiwan (EWT) up to $19 per share to gain exposure to this trend.

Investors can add exposure to South Korean equities through Deutsche X-trackers MSCI South Korea Hedged Equity (DBKO), an ETF that provides broad exposure to the market while hedging against fluctuations in the value of the US dollar relative to the South Korean won.

We also continue to like Shinhan Financial Group (055550:KS) (NY: SHG), one of South Korea’s four largest financial institutions. Diligent risk management has translated into sterling asset quality.

SK Telecom (017670:KS) (NY: SKM), is South Korea’s leading wireless carrier. Its ADR sports an indicated yield of 5.72%, offering an appealing combination of yield, value, and growth potential.

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By Yiannis MostrousEditor

Capitalist Times

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CAUSEWAY: THREE ROADS TO GLOBAL GAINS

Causeway has been a leading name in international equity investing for mutual fund investors for more than a decade.

The firm launched its flagship Causeway International Value Fund (CIVVX) in 2001. Since then, its original investors would have tripled their money by now, despite a 42% loss in 2008 during the height of the global financial crisis.

On the fundamental side, Causeway is a large-cap value investor, though not a deep value stock picker that is willing to wait for as long as it takes for a company to recover.

Instead, the company’s fundamental investing team seeks out temporarily downtrodden companies that it expects to recover within two years.

To help winnow the field, Causeway employs screens to identify attractive foreign equity markets by comparing the dividend and earnings yields of countries with the bond yields of their local markets.

The second hurdle compares stocks within industries for value, based on the total market value (equity plus debt) as compared to a measure of cash flows, and then for the strength of their per-share earnings revisions.

International Value is almost entirely invested in stocks within developed markets. The team favors Europe, which recently made up more than 70% of assets in International Value.

In 2007, the firm launched Causeway Emerging Markets (CEMVX), which gained 6.6% annually in the five-year period ended April 30, 2015, beating the average annualized return of emerging market stock funds by more than four percentage points.

While Causeway’s fundamental investing team is heavily focused on the value style of investing, the quantitative team behind emerging markets is less centered on finding absolutely cheap stocks.

Their system incorporates three main bottom-up factors: valuation, earnings, and price momentum, favoring companies with profits that are growing at an accelerating pace.

The team currently favors emerging Asia over Latin America, in which it has considerably less than the benchmark; South Korea and Taiwan seem especially attractive on a top-down basis.

Investors who like the idea of owning both International Value and Emerging Markets don’t actually have to buy shares in each fund. Instead, they could buy Causeway International Opportunities (CIOVX), the assets of which are divided among the two strategies.

To decide how much to put in each, Causeway compares valuations, risk, and financial strength of emerging versus developed foreign markets and will put a maximum of 25% of the fund in emerging markets positions. Currently, emerging accounts for about 20% of assets.

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By Mark SalzingerEditor

No-Load Fund Investor

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EMERGING MARKETS: 4 FALLEN ANGELS—EWZ, EPHE, RSX, NGE

The term “fallen angels” usually applies to stocks that have temporarily dropped out of favor; however, the term can also apply to an entire market, such as we currently see with some emerging markets.

Take a country, for example, like Brazil, or the Philippines, or Indonesia, or any of the other countries that were doing very well during the economic expansion.

They have young, energetic work forces and lots and lots of commodities to sell. And then you have the global slowdown—the economic slowdown that we have had the past few years—and they can have the same sort of pattern as a fallen angel company can have. I call them fallen angels because they won’t stay down for very long. I think there is going to be a lot of money to be made by investors who buy into them now.

By the way, let me just say that if you have children, or grandchildren, or you’re a younger investor who’s got a long-term retirement plan, I don’t think that you can do better in terms of percentage gains than you will with emerging markets.

As for individual market, Brazil has everything, agricultural commodities, mineral commodities, and energy. It has a very energetic workforce. It’s industrialized. I’m really very bullish on Brazil long-term.

The iShares Brazil Fund (EWZ) invests in the major index of Brazilian stock and that’s the way for US investors to take positions.

The Philippines is an overlooked Asian country. The Philippines reminds me of Brazil 20 years ago and I think they have the same sort of potential with a couple of advantages.

Most people in the Philippines that are in the workforce speak English. They understand how we do business and how we think and those are big advantages.

The Philippines is also industrializing and putting a special emphasis on technology. Investors interested in exposure to this market should consider the iShares Philippines Fund (EPHE). A third fallen angel market is Russia. They have vast mineral and energy wealth and they are signing deals right and left with China.

Russia right now is selling very, very cheap. I really do recommend that people with long range horizons invest in Russia at these levels. For exposure to this market, I like the Market Vectors Russia Fund (RSX). That’s the way for Americans to invest in Russia.

Finally, Nigeria recently eclipsed South Africa to become the largest economy on the continent.

The main problems that are keeping Nigeria from another growth spurt are low oil prices and the Islamic extremist group Boko Haram. I think solutions to both problems are in the works.

For aggressive investors with long-term time horizons, I think the Global X Nigeria Index Fund (NGE) will be very rewarding, although the ride will be bumpy.

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By Jim PowellEditor

Global Changes & Opportunities

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By Benjamin ShepherdEditor

Personal Finance

EUROPE: READY FOR A REVIVAL? CAUSEWAY INTERNATIONAL VALUE AND VANGUARD EUROPEAN STOCK INDEX

Although US growth has been virtually nil, Europe’s economy is starting to revive. European consumer prices halted a four-month slide, the euro is strengthening, and yields on German bonds are rising. Although our portfolio doesn’t have any Europe-specific funds, we’re not bereft of European exposure either.

At Causeway International Value (CIVVX), managers Sarah Ketterer and Harry Hartford like companies in crisis because that’s when you get them cheap.

The duo found quite a few bargains, ramping up their European exposure to more than 70% of assets. In particular, Ketterer and Hartford added to their positions in European banks over the past few quarters.

Given our own experience with quantitative easing, bulking up on banks makes sense because they profit nicely from lending virtually free capital at interest.

The fund has had some ups and downs, underperforming 75% of its peers last year. But it’s also slightly less volatile and tends to outperform long-term, ranking in the top 10% over the past five years.

If you’re looking for pure European exposure, Vanguard European Stock Index (VEURX) is one of the best and cheapest funds around.

Tracking the FTSE Developed Europe Index, the fund holds more than 500 large- and mid-cap stocks from 17 developed European nations.

At 21.6% of assets, financials get the greatest weighting, followed by healthcare at 14.1% and consumer staples at 13.3%, though every sector is represented to some degree.

With a 0.26% expense ratio, the fund offers an inexpensive, reliable way to capitalize on a continent buoyed by quantitative easing.

If you prefer exchange-traded funds, buy Vanguard FTSE Europe ETF (VGK), the same fund in a different wrapper, but with an even lower 0.12% expense ratio.

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GLOBAL YIELDS AND DIVERSE DIVIDENDS: ARROW DOW JONES GLOBAL YIELD ETF

Conventional wisdom explains that it is vitally important to diversify; this is intended to minimize risk from movements or events that disproportionately hurt one type of investment.

A fund that offers a way to gain the benefits of diversification is Arrow Dow Jones Global Yield ETF (GYLD).

This fund takes a balanced multi-asset approach across five different strategies. Its holdings emphasize dividends and are based on five separate, specific indexes.

It has approximately even holdings in equities, real estate, sovereign debt, corporate debt, and alternative assets, with each subcategory targeted towards dividend-paying investments. As the fund’s name indicates, it includes positions from around the globe in each of these areas.

The fund pays out an overall yield of 7.91%, compared to an expense ratio of 0.75%, so investors are rewarded nicely for owning it.

Though it has declined by 1.42% this year, when its monthly dividends are accounted for, investors in GYLD have profited in 2015 overall.

In terms of individual positions, this fund allocates 8.36% of its assets to its top ten largest positions.

These include Shenzhen Investment Ltd., 1.12%; Ladbrokes PLC, 0.91%; Lewis Group Ltd., 0.87%; LRR Energy LP, 0.84%; and Chesapeake Granite Wash Trust, 0.81%.

In terms of sectors, the fund is most strongly allocated to real estate, financial services, and utilities. GYLD’s portfolio of countries includes the United States, Australia, Singapore, France, and many others.

For investors seeking a simple way to invest in a number of asset classes for a high and diverse yield, Arrow Dow Jones Global Yield ETF could be just what they want.

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By Doug Fabian Editor

Successful ETF Investing

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By Ingrid HendershotEditor

Hendershot Investments

HOP ABOARD CANADIAN NATIONAL

Founded nearly 100 years ago, Canadian National Railway (CNI) now spans eight Canadian provinces as well as 16 US states, transporting freight traffic over an approximately 20,000 mile rail network that reflects more than $8 billion of acquisitions since 1998.

Operating the largest rail network in Canada and the only transcontinental network in North America, the company serves close to 75% of the US population and all major Canadian markets.

CNI carries more than 300 million tons of cargo for exporters, importers, retailers, farmers, and manufacturers.

With a business model focused on cost efficiency and asset utilization, CNI generates highly profitable operations. Net profit margins have approximated 25% or better over the last five years.

Canadian National is loaded with strong operating cash flows, which have totaled nearly $17 billion over the last five years. Over the same period, the company has reinvested nearly $10 billion in capital expenditures to expand their network and build for the future.

While maintaining a prudent financial structure, the company has also returned nearly $10 billion to shareholders through $3.2 billion in dividends and $6.6 billion in share repurchases over the past five years, with 28 million shares authorized for future share repurchases.

CNI has boosted its dividend for 19 straight years at a 17% compounded annual growth rate. In 2015, CNI increased the dividend a whistle-blowing 25% with a dividend payout of 35% of earnings targeted over time.

Over the past five years, revenues have compounded at a 10% annual rate with EPS rolling up a 14% annual growth rate.

CNI delivered solid 2015 first quarter results with revenues steaming ahead 15% to $3.1 billion and EPS (adjusted to exclude a gain on a rail line sale last year) firing up a 30% gain to $.86.

For the full 2015 year, management reaffirmed their outlook for double-digit earnings growth.

Long-term investors should hop aboard Canadian National Railway, a high quality industry leader generating double-digit growth and profitable operations while also rewarding shareholders with growing dividends and share buybacks. Buy.

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IDT: HOTLINE TO HAVANA

For the first time in a long time, residents of the United States and Cuba can call each other directly. And they’ve got one company to thank: IDT Corp. (IDT).

IDT is the largest US-based carrier of international long-distance calls. And right now, it’s the only US carrier to have a direct interconnection with Cuba.

You see, when Barack Obama set out to thaw relations with our island neighbor, IDT was quick to move. The company rushed to ink a deal with Cuba’s state telecom company, Etecsa.

As a result, it has a huge first-mover advantage and will be one of the first Western companies to profit from Cuba’s reconciliation with the United States.

Established in 1990, IDT Telecom has been providing long-distance phone service for 25 years. In fact, it’s the seventh-largest long-distance carrier in the world.

It is also a pioneer in voice-over-Internet communications. IDT’s flagship product is Boss Revolution, a smartphone app that connects long-distance calls over the Internet.

It’s also a portal through which people can not only communicate but also transfer money and pay bills.

Boss was designed specifically for foreign-born and first-generation immigrants, people who move to the United States for work and then send part of their paychecks back to their families.

Over half of foreign-born Hispanics in the US routinely remit money, with annual remittances from the country totaling $50 billion a year.

IDT’s disbursement network includes over 37,000 locations in 17 Latin American nations, as well as 1,400 locations in 18 African countries. Now you can add Cuba to the list.

Finally, IDT’s Zedge app enables users to change their mobile phone’s ringtones, wallpapers, notification sounds, and icons using a library of free, high-quality content. It’s been installed on 140 million devices and has 27.5 million active monthly users.

Make no mistake; Cuba and the United States are headed down the path of reconciliation. It may take a few more years, but a new emerging economy is being introduced to the world stage.

Opportunities like this don’t come around very often. IDT is going to make the most of it. And you should, too. We’re buying IDT Corp below $19.

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By Nicholas HodgeEditor

The Crow’s Nest

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INDIA AND INFRASTRUCTURE: ICICI, EGSHARES INDIA INFRASTRUCTURE ETF

India is the world’s largest democracy, one that voted in pro-business leadership in the form of the Narendra Modi government.

It is arguably the first pro-business government in India’s post-independence history. Further, India is a major beneficiary of low oil prices.

According to Bloomberg, the drop in Brent is a gift that could give Prime Minister Narendra Modi the room needed to step up infrastructure spending as he prepares the 2015 budget.

The International Monetary Fund added to the euphoria by forecasting India will become the world’s fastest-growing major economy by March 2017.

The IMF recently came out and said that India’s gross domestic product is likely to grow at 6.3% (marginally down from the 6.4% projected in October) in the next fiscal year and 6.5% in the year to March 2017.

The Indian Finance Ministry was even more bullish and said GDP could hit 8.5% this year.The World Bank has echoed this idea and said that India’s growth will eclipse China’s by 2017.

Part of this is due to a slowdown in China and part of it has to do with the slow and chaotic muddling through of the Indian economy. India has a lot of problems, but a centrally planned economy isn’t one of them.

Totalitarian states can get the trains to run on time…for a while. But nothing beats a free market democracy for price and demand discovery. It looks like a mess, but it works.

India has been slowly (and I mean slowly) opening up its markets for the past 20 years. With the new government, change is accelerating, and the payoff is here.

The new government is spending money on infrastructure, cutting red tape, and reducing interest rates.

The government plans on increasing infrastructure spending from 6% of revenues to 9% with five ultra-mega power projects, as well as new tax-free bonds for roads, rail, and irrigation.

I’ve recommended India’s largest private bank ICICI (IBN), based on general growth. But another investment opportunity you might want to look at is the EGShares India Infrastructure ETF (INXX).

If you’ve ever been to India, you know they have some of the world’s worst roads. Heck, they still make gravel by hand with a pick.

By Christian DeHaemerContributor

Energy & Capital

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INXX is an exchange-traded fund geared to track the performance of Indian infrastructure companies, with the industrial engineering sector comprising 19% of the fund and the electric utility sector coming in second at 18%.

The exchange-traded fund currently has $50 million in assets and a 0.85% expense ratio. It has a P/E of 16 and trades at $12.95. Buy it.

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INVEST IN SPANISH-LANGUAGE MEDIA: GRUPO TELEVISANext to English, the language most spoken in the US is Spanish. With nearly 40 million speakers, this offers enormous opportunity to Spanish-language media in the Americas.

Our favorite stock in this arena is Grupo Televisa (TV), which offers a full array of Spanish-language media and entertainment.

Approximately 85% of revenues come from Mexico. And while Mexico’s economy has somewhat disappointed over the past year, or so, projections point to growth above 3% over the next several years.

A peppier Mexican economy will provide a clear boost to Televisa. But what should move the needle more than anything is faster adoption of both cable and pay TV throughout the Spanish-speaking parts of North America.

Currently only 50% of Mexicans have access to pay TV. That’s a very low number and a great opportunity for Televisa.

We also expect that—in both the US and Mexico—the Spanish-speaking population will be adopting cable at an accelerated rate. Over the past three years, Televisa’s revenues from cable television have risen 40%, equating to an annual growth rate of 12%.

Keep in mind that Televisa is a vertically integrated operator, which means that increased penetration of higher-priced media leverages the value of its content.

The company has a solid balance sheet, and despite heavy infrastructure spending, has generated positive free cash flow for at least the past five years. Indeed, for the 12 months ended in March, the free cash flow yield was over 7%.

Few media companies have such a large and vertical opportunity within a captive audience.

Long-term growth approaching 20% is a well-measured projection and should lead to market-beating returns.

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By Stephen LeebEditor

The Complete Investor

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By Nicolas VardyEditor

Triple Digit Trader

MALLENOX: ISRAELI CLOUD PLAY

Israel-based Mellanox Technologies, Ltd. (MLNX) makes high-speed switches, cables, and other devices to increase the efficiency of computer networks that make up the fast-growing Internet cloud.

Here’s why I expect it to jump higher in the weeks and months ahead.

First, cloud computing is booming. Both companies and individuals are increasingly storing and retrieving programs, photos, and other data on the cloud.

The most extreme case is in the tiny country of Estonia. As my visit there revealed, the entire Estonian government is moving itself in the cloud so that it can continue to operate unaffected by any invasion by Russia.

Second, this boom is reflected in the company’s growth prospects. Mellanox has one of the highest projected earnings growth rates for any stock listed on the Nasdaq, with earnings per share almost expected to double for this $2.17 billion market cap company.

Finally, the stock itself offers a solid technical set-up. The stock jumped to a new 52-week high on April 22, after a better-than-expected strong earnings report, but has pulled back since. This offers a very solid entry point in the context of an established technical uptrend.

Mellanox’s earnings and sales growth have accelerated in the past three quarters, with EPS growth topping analysts’ views by 25% in Q1.

Consensus projections expect a 97% earnings gain this year on the back of a 37% rise in sales. For all that, the stock still trades at a reasonable forward price-earnings (P/E) ratio of 18.34.

Technically, the stock has been in a flattish uptrend, rising steadily with ever-higher bases since July 2014. It currently is technically slightly oversold and just bounced off of its 50-day moving average recently.

According to Investor’s Business Daily, the stock’s relative strength is now hitting new highs.

And its Accumulation/Distribution Rating has risen to A+, indicating strong demand for the shares, which should help drive the share price up. Buy at market today and place a stop at $41.50.

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MORNINGSTAR EYES FOREIGN, LARGE-CAP VALUE: CIVVX, TBGVX, VTRIX

Causeway International Value (CIVVX)

Causeway is a deep value because it buys battered shares in hard-hit industries.

Over time, that’s worked quite nicely, although lately it hasn’t performed so well. Owning energy and materials has been a recipe for trouble, but managers Harry Hartford and Sarah Ketterer have had far more wins than losses.

These things tend to rotate in and out of favor, so this fund may be a good rebound bet. The fund is also noteworthy for its rule against owning emerging markets stocks, so investors are getting developed markets exposure only.

Tweedy, Browne Global Value (TBGVX)

Tweedy, Browne Global Value has energy and materials stocks, too, but only in line with the foreign large-value average.

The fund hedges its currency exposure and that’s been a boon recently because of the strengthening dollar.

But the reason for buying here is Tweedy’s steadfast value approach. Tweedy uses a Buffett-like strategy that emphasizes patiently buying solid franchises at a discount.

It has only recently returned to energy for the first time in more than a decade. The fund now has stellar returns over the trailing three-, five-, ten-, and 15-year periods, but it is still prone to stretches when it falls out of favor.

Vanguard International Value (VTRIX)

Vanguard International Value has three flavors of value to offer. Lazard Asset Management, which runs 40% of assets, is a relative value manager and Edinburgh Partners, which runs 35%, uses a more traditional value approach.

Deep-value shop ARGA Investment Management runs 25% of the fund. That approach means the fund tends to avoid the top or bottom decile on a yearly basis, but over the long haul, returns are solid.

The mix of three advisors means the portfolio isn’t drastically different from the norm, but the fund has bigger weightings in Japan and emerging markets than its peers. With fees of just 0.44%, management has a fairly low bar to beat its benchmark.

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By Russel KinnelEditor

Morningstar FundInvestor

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NEW ERA FOR GLOBAL BANKING: HSBC, SAN, WBK, BBD

The global banking sector is on the threshold of a new era; stiffer financial regulations will make them less risky and a wave of technologies will cut costs.

The weaker institutions are being forced to withdraw from the global stage, which in turn is creating new opportunities for the survivors to become bigger and stronger.

As a result, the stage is set for the top global performers that are left to win market share, increase profits, and deliver fatter dividends.

HSBC (HSBC) recently announced that it might move its headquarters back to Hong Kong, where the firm started in 1865. This would be a great development.

One of the world’s largest banks, HSBC has been repositioning, withdrawing from retail banking in Brazil and Turkey.

Asia contributed 78% of profits last year and it is wisely deciding to concentrate there more. Offering a dividend yield of 5.19%, HSBC is a buy up to $55.

Banco Santander (SAN) has been dominant in Latin America, another of the world’s great emerging markets, while benefiting from an improvement in its home European market.

Santander recently reported that its earnings in Spain jumped 42% in the first quarter. In Britain, the bank’s profit rose 27%. And operations in Latin America saw profits increase by 28.5%.

It’s clear that the reforms instituted by the recently installed chairwoman, Ana Botín, are paying off. With a dividend yield of 9.25%, SAN is a buy up to $10.

Among the strong regional banks in high-growth countries is Westpac Banking Corp. (WBK)—Australia’s oldest bank—which is expanding into Asia.

We’ve been impressed with the bank’s ability to weather Australia’s recent economic downturn and the fact that the bank has continued to be profitable in the wake of Australia’s commodity-market collapse. With a dividend yield of 5.89%, WBK is a buy at $34.

Brazil’s third largest bank, Banco Bradesco (BBD) has been able to weather the storms in its home country better than most.

As a growing number of Brazilians have accumulated savings, the bank’s total deposits rose from around $25 billion at the beginning of the last decade to nearly $150 billion today.

As Brazil improves, we believe the bank will capture more profits. With a 4.44% yield, BBD is a buy up to $14.

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By Richard StavrosEditor

Global Income Edge

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PAKISTAN: AN EXOTIC SPECULATION—GLOBAL X MSCI PAKISTAN ETF

About a year ago, I managed to figure out how to buy into Pakistan, as long as you are willing to accept the very high risks associated with a volatile and speculative emerging market that is far off the radar of most investors.

I called upon a college classmate who is the widow of a Pakistani, a licensed stockbroker, and a former resident of Lahore.

She came up with an ETF from Deutsche Bank based on the MSCI index traded in Hong Kong; I bought XDBMSCI Pakistan (HK: 3106), even though this exotic position has proved to be hard to track, trade, or transfer.

Now, Deutsche Bank has launched a US variant called Global X MSCI Pakistan ETF (PAK), traded right here in the USA.

It is important to add that my hopes for a peace deal between India and Pakistan are no longer high. Another concern is that Pakistan runs on compressed natural gas whose shortages limit factory growth now.

However, the Pakistan economy has a few strong suits despite being feudal, Islamic, military controlled, and backward.

First of all, the country’s main port of Karachi will be doubled under a $250 million investment in Gwadar, near the Iranian border, which will be linked by rail with China.

Pakistan is also attracting international loans from the World Bank and support from the International Monetary Fund, and most importantly, remittances from workers off at jobs in the Middle East.

While women are still oppressed, the literacy rate has risen to around 60%. Meanwhile, poverty levels are much improved. Now 17% of Pakistanis are poor by international tallies, compared to 37% seven years ago.

The economy is among the growing the “next eleven” expected to become engines for global growth right after the famous BRICs.

Growth has also come from cement and food, particularly Hallal food production for global brands as well as fruits and veggies.

Apart from agriculture and the port, the new Pakistani growth has come from mining, fertilizers, and manufacturing, notably of textiles and apparel made by both foreign companies and fledgling Pakistani ones from homegrown cotton.

By tradition, there is banking and finance. Pakistan also boasts such heralds of modernity as a widespread use of cellular phones from telcos in Egypt, Norway, Singapore, Abu Dhabi, and China, as well as a local former landline firm.

About $10 billion has been invested in telcos by foreign investors, including phone makers as well as cell operators.

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Global Investing

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Thanks to being so wired up, it boasts freelance IT hands, freelance journalists, a freelance advertising industry, and tourism.

The halving of the value of the Pakistani rupee in the past five years has boosted export competitiveness.

Government liberalization policies have helped free up the employment system and there are even plans to privatize state-owned enterprises.

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PIMCO INCOME: MULTI-SECTOR WINNERThis fund seeks out the best income-generating opportunities in all market climates, from any global sector.

PIMCO Income Fund Class D (PONDX) will also shift its portfolio weightings to wherever attractive yields can be generated.

The fund’s portfolio is dividend into two sections. One holds high-yielding securities that are expected to have good returns if the economy is growing strongly. And one holds higher-quality obligations that would perform better in a weaker economy.

In both sections of the portfolio, managers seek to exploit relative value opportunities arising from what they believe are securities that are mis-rated by ratings agencies.

Recently, the higher yielding portion of the portfolio has emphasized senior positions in the capital structure, with 46% of assets in mortgage securities, primarily large, quasi-sovereign entities and long-dated Brazilian inflation-linked securities.

In the higher quality section, the managers have focused on developed countries, primarily Australia. Further, US duration hedge-aided results as longer-term interest rates have increased.

Over the long haul, this fund has had outstanding performance. From inception through the end of the first quarter, the fund returned 9.4% annualized .1% for the Barclays US Aggregate.

For the trailing five-year period through May 29, the fund placed in the top 98% of the multi-bond sector category, with a 10.7% return.

PIMCO expects global growth to improve modestly this year, aided by lower oil prices and global central bank stimulus programs; over 20 central banks eased monetary policy in the first quarter.

The fund also focuses on securities with floating rates; currently, over 43% of the fund is invested in such issues. Overall, we consider this fund to be an all-sectors winner.

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By Walter FrankEditor

MoneyLetter

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RENREN: SECRET WAY INTO IPOS

Social Finance—better known as SoFi—is a private company that began in 2011 as a peer-to-peer social lender for student loan refinancing.

With roughly 200 employees, SoFi is a small company. Even so, the company has made more than $1.75 billion of loans. According to SoFi, it’s saved the average borrower $11,783. This year, SoFi expects to underwrite $4 billion of loans.

That’s attracted lots of attention from investors. In total, SoFi has now raised $766 million. Soon after this latest round, Bloomberg reported that Social Finance was aiming for a $3.5 billion valuation in a 2015 IPO.

And while you can’t invest directly in SoFi, there is a secret way to get invested before an IPO. You can invest in a little-known stock called Renren (RENN), a venture capital firm based in Beijing.

Renren was originally dubbed the “Facebook of China.” But its core business has languished, with revenues cut in half between 2012 and 2014.

At the same time, Renren has been making a series of strategic investments in tech firms that are innovating the finance sector. In total, Renren has invested in more than 30 venture capital deals.

The biggest of those investments is the firm’s $89 million investment in SoFi, a 24.8% stake. And that’s why you should consider buying the stock.

Another one of Renren’s recent investments is in Cheyipai, a leading online used car marketplace, operating in 163 cities. Another is Motif Investing, an online brokerage firm that makes it easy to invest in ideas or themes.

And in April, Renren led a $70 million investment in LendingHome. The peer-to-peer mortgage lender has already originated more than $100 million of mortgages in the last year.

In another deal, Renren invested with noted hedge fund manager Kyle Bass. Renren invested $50 million in Bass’s Japan hedge fund and another $30 million in his pharmaceutical patent fund.

Overall, based on my analysis, the shares are worth at least $5.27. That provides at least 31% upside from the current price. However, the long-term upside could be far greater.

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By Ian WyattEditor

Million Dollar Portfolio

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By Jim PearceEditor

Smart Tech Investor

RICOH: PRINTERS AND PROFITS

Investors have been slow to embrace Japan-based Ricoh (RICOY) as it continues to grapple with turning around a massive ship in choppy waters.

Ricoh continues to tinker with its product development to grow revenue. It should not shock any investor that demand for large scale corporate printers and copiers is a stagnant business.

However, Ricoh is attempting to reinvigorate sales with the introduction of specialized production printing options. Customized formatting options for billing and direct mail templates can help Ricoh expand sales to new customers. Scanners still are a source of growth as companies must digitally convert and warehouse the stacks of paper documents that still litter their desks.

Although Ricoh is a global company, 60% of its sales are still generated from Japan.

The Japanese economy has been shrinking rapidly due to a draconian increase in its consumption tax. That tax was increased by 60% from 5% to 8% in April 2014.

Another massive increase to 10% slated for October 2015 has been delayed as Japanese Prime Minister Shinzo Abe ponders how to counteract Japan’s withering GDP. Poor economic numbers have a secondary influence on Ricoh as well.

As a foreign company, Ricoh reports earnings less frequently than its US-based counterparts. On April 28, the company reported earnings for the year ending March 2015 as well as the quarter ending March.

For the year, Ricoh’s revenue was up almost 2% but its earnings were down 4%. Domestic Japanese sales were flat versus last year. Revenue for the rest of the world was up nicely, but after adjusting for foreign exchange valuations, would have been flat.

The yen lost 15% of its value versus the dollar in Ricoh’s fiscal 2015 year and has shrunk another 4% since then. Management’s guidance for 2016 is predicated on a slight improvement in the value of the yen.

Management estimates that Ricoh can grow revenue 7.5% in 2016 and earnings 20%. While this may appear frivolous, there is a real chance Ricoh can grow earnings nicely next year.

Meanwhile, the stock offers a healthy 2.2% dividend yield and trades at a relatively low PE of 12. Although cash flow generation was down in 2015, it was still four times the amount needed to cover the dividend payment.

Despite a 5-for-1 stock split in January, the volume traded on Ricoh is still very thin, with daily trading volume averaging only 9,000 shares.

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SUEZ ENVIRONNEMENT: OPPORTUNITIES IN WATER

California’s move to ration water amid a prolonged drought made national headlines in the US; but for much of the world, tenuous supplies of potable water are old news.

These challenges create a major opportunity for a handful of service providers that specialize in solutions for water and wastewater challenges.

Suez Environnement (FP: SEV; OP: SZEVY) traces its origins to a concession granted by Napoleon Bonaparte in the early 19th century to provide water services to Lyon (France’s second-largest city).

The company opened a new chapter in its storied history in July 2008, when gas and electric utility GDF Suez spun-off its waste and water management services as Suez Environnement.

Last year, the spin-off generated 61.7% of its operating profit from its European water (42.2%) and waste management (19.5%) segments.

However, the company continues to expand its presence internationally; in 2014, for example, water-related services in international markets accounted for more than 38% of its net income, a 61% increase over the past two years.

Lower prices for recycled products and a slump in European industrial activity have weighed on Suez Environnement’s waste management division in recent years. Management expects this softness to continue in 2015, despite an improving EU economy.

Fortunately, robust growth in the water business and in international markets more than offset this weakness last year, enabling the company to grow its free cash flow by 12% and its net income by 18.4%.

Cost-cutting efforts at Suez Environnement’s water operations contributed to this impressive performance; the company reduced its overhead by EUR160 million last year, exceeding its target of EUR125 million. And management aims to deliver another EUR400 million in savings over the next three years.

Over the long-term, Suez Environnement stands to profit from opportunities in international markets where potable water is hard to come by.

Recent ventures of this nature include a sludge recovery project in China, the remediation of Long Island’s sewage system in the wake of Hurricane Sandy and desalination projects in India and Morocco. The company has also grown its water utilities in Chile and Italy.

Investors who buy the stock before May 15, 2015, will receive Suez Environnement’s annual dividend of EUR0.65 (US$0.71) per share. The company has maintained this payout for the past nine years.

Management has targeted a payout ratio of 60% to 65%—suggesting that a dividend increase should be in the cards by 2017—assuming that the company hits its conservative guidance. Suez Environnement’s American depositary receipt rates a buy up to US$10 in our Aggressive Income Portfolio.

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By Roger ConradEditor

Conrad’s Utility Investor

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TAL EDUCATION: EDUCATION IN CHINA

There are few places where education is valued as highly as in China; because of that attitude, demand for education is fiercely competitive in China.

Our favorite stock in the group today is TAL Education (XRS), a leading provider of K-12 after-school tutoring classes, one-on-one tutoring sessions, and more recently, online courses.

Beijing and Shanghai represent more than half of all revenue. But TAL now operates in 19 cities (the plan is to enter two to four new cities per year) and gets about 45% of its business outside those two big cities.

All in all, it now operates 289 learning centers, which include 202 small class centers and 87 locations focused on one-on-one tutoring.

Size is a big reason for its success and a reason we think it will do well for many years. Being so large, and with a top-notch reputation, it attracts more students, which then attracts more and better teachers.

That online piece could eventually be big, it’s tiny right now (just $15.9 million in revenue last year), but is the leading online tutoring brand in China and should expand rapidly for many years.

Companywide, these bullish factors have led to excellent, consistent growth. Revenues have risen between 33% and 50% each of the past seven quarters.

Earnings have been lumpier, as the tutoring business is seasonal in China. However, the bottom line has risen from 27 cents per share in fiscal 2013, to 86 cents to $1.03 last year. Analysts see earnings up another 23% this year and 34% next.

TAL Education has all the pieces we like to see in a growth stock: solid sales and earnings growth, an excellent growth story, and solid estimates going forward, both from analysts and management.

The last piece of the puzzle is the chart, which is presenting a nice entry point. XRS has formed a beautiful cup-shaped base. We think you can buy shares here and, ideally, ride the stock’s new uptrend for many months.

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By Paul GoodwinEditor

Cabot China & Emerging Markets Report

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TOP BET ON BOTTLED WATER: DANONE, NESTLE SA, COCA-COLA, AND PEPSI

A survey conducted late last year by Harris Poll showed that 96% of Americans think they should be drinking more water. And 95% thought that bottled water was a healthier choice than soft drinks.

But that’s not to say it’s only a developed world phenomena. Sales of bottled water in China, for example, have doubled in the past five years.

Overall, global sales of plain bottled water are set to surpass those of soft drinks in 2015. That is a first.

This thirst for bottled water here and around the world has set off a mad scramble among the top four players in the sector: France’s Danone (DANOY), Switzerland’s Nestle SA (NSRGY), Coca-Cola (KO), which makes Dasani, and PepsiCo (PEP), which bottles Aquafina.

My favorite company among the big four bottled water stocks is Nestle. Unlike Coca-Cola and Pepsi, it is not saddled with the baggage associated with the soft drinks industry.

And I like its emphasis on the US market, where Nestle is the market share leader in bottled water sales by volume.

Nestle is investing $200 million to add seven US production lines for water. The production capacity is double what the company added over the past five years.

The company is also placing greater focus on sparkling waters versus plain water. It is a faster-growing business (14% vs. 8% last year).

Nestle is also moving in a big way into the home water delivery business. It says this business grew twice as fast (by 14%) last year as deliveries to stores.

And in the first quarter of 2015, it grew by 21%. The water delivery business now accounts for about 20% of Nestle’s $4 billion US water business.

Can anything slow down the bottled water craze? Environmentalists would like to try. They say most of the plastic bottles are not recycled.

The bottled water companies counter by saying they have greatly reduced the weight of the plastic bottles, thus lowering the environmental impact.

What could change the equation regarding bottled water sales? There could be, at some future date, new technology that will purify tap water in a cost-effective way while producing great-tasting water. No technology has quite hit on the magic formula yet.

Until that happens, demand for bottled water will continue to rise. That’s good news for all the major players in the sector and Nestle in particular.

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By Tony DaltorioContributor Daily Profit

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TOP-RANKED IN EMERGING BONDS: T. ROWE PRICE EMERGING MARKETS BOND FUND

T. Rowe Price Emerging Markets Bond Fund (PREMX) is a top-ranked emerging markets bond fund with a long-tenured manager and below-average costs.

The fund is lead-managed by Michael Cornelius, a 26-year veteran at T. Rowe Price who has run the fund since 1994.

On a larger emerging market fixed income team, he works with two additional portfolio managers, Andrew Keirle and Samy Muaddi, and 13 emerging market sovereign and corporate bond research analysts.

Across 65 countries, fund management conducts qualitative and quantitative assessments on an issuer’s creditworthiness resulting in the formulation of a proprietary credit rating. From there, the analysts forecast return risk-adjusted expectations with a heavy emphasis on relative value across counties.

While a portfolio of 400-500 bonds is built based on bottom-up decisions, asset allocation across countries and regions is undertaken based on risk assessments.

The fund is diversified across emerging market sovereign, emerging market corporate, and frontier market bonds. Cornelius and team think emerging debt markets are inefficient, creating opportunities to spot undervalued credits.

However, the fund’s turnover rate, at 46%, is half that of the Lipper emerging markets hard currency debt funds, indicative of T. Rowe Price’s patience. As such, one of the fund’s largest country allocations is to Venezuela (6% of assets).

Jeff Kalinowski, the fund’s portfolio specialist, acknowledged that imprudent Venezuelan government policies as well as weakness in the price of oil hurt the country’s fiscal condition and created volatility, but T. Rowe Price thinks that a default within the next year is unlikely.

The fund’s largest exposures are to Brazil (14%) and Mexico (10%). Turkey, Indonesia, and Russia rounded out the top five.

Typically, the higher the yield, the greater the credit or interest rate risk. Yet we believe T. Rowe Price Emerging Markets Bond Fund—with its 6.1% 30-day SEC yield—offers a strong combination of performance, risk, and cost factor attributes.

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By Todd RosenbluthS&P Capital IQ Director of

Mutual Fund Research Standard & Poor’s

Marketscope

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VOLKSWAGEN GROUP: MORE THAN VWS

Reports out of the EuroZone suggest that credit is easier to get, loan volumes are rising, lending rates are falling, and financial flows into the area are on the rise. These all portend good things for modest GDP growth in 2015.

And that means many European equities that already look undervalued based on conservative forward earnings estimates could be well-positioned for a sustained rally.

One way to play this trend to play is with one company you already know—Volkswagen Group (VLKAY)—the world’s second-largest auto manufacturer.

The VW brand itself, while well-recognized, only has around 3% market share in the US. This is a major opportunity for the company.

It is making some progress and the addition of connected-car features may help improve US customers’ perception of the brand.

One interesting feature is the recently announced Apple Watch app that will allow VW Car-Net-enabled vehicles to monitor fuel levels and car location. The app will also be able to control locks and it will allow parents to remotely monitor the speed of the vehicle, extremely handy for parents of teenage drivers.

Meanwhile, there’s a lot more to the VW Group than just the VW brand. It also owns premium and ultra-luxury auto brands Audi, Porsche, Bentley, and Lamborghini, as well as the motorcycle company Ducati.

Indeed, the importance of the Audi and Porsche brands to the VW Group can’t be overstated. The two premium brands only generate 30% of volume, but they produce 70% of earnings before interest and tax.

I see 20% upside in shares of VW Group right now, with significant additional upside potential if the company is able to execute its cost-savings plan and capitalize on new product introductions with the Audi and Porsche brands this year.

There remains even more upside should the core VW brand gain momentum in the US market; new product introductions later in 2015 should help us see if the VW brand is on track.

The stock is currently trading at a significant discount to peers, with a current-year P/E of under 10. I see this as a relatively low-risk way to play a recovering European economy with a company that has a global customer base.

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By Tyler LaundonEditor

Top Stock Insights

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WESTJET: CANADIAN AIRLINE FLIES HIGH

WestJet (TSX: WJA) (OTC: WJAVF) flies 113 Boeing 737s and Bombardier Q400s, and at 6.8 years, its fleet is one of the youngest in the business.

Its low-fare approach has enabled the company to expand rapidly during the past five years.

WestJet and its 10,000 employees now serve 90 destinations in North America, Central America, the Caribbean, and Europe.

WestJet continues to add new routes to its system and new aircraft to its fleet. Revenues increased 6% and EPS climbed 28% during the 12 months ended March 31, 2015. Lower fuel prices provided a big boost to earnings.

The company prides itself on its outstanding service to passengers after becoming a J.D. Power Customer Service Champion (one of two companies in Canada), ranking third in Aon Hewitt’s best employers in Canada, and chosen as Canada’s most preferred airline in 2014. I expect revenues to rise 8% and EPS to surge 20% to $3.25 (Canadian) during the next 12-month period. Earnings could exceed my forecast if oil prices remain low, although the weakening Canadian dollar could offset part of the gain.

At 9.9 times current EPS and with a dividend yield of 2.1%, WJA shares are clearly undervalued. The quarterly dividend was recently raised to $0.14 from $0.12 CAD, which reflects the board of directors’ positive outlook for the company.

I expect WJA shares to reach my minimum sell price target of $34.65 CAD within one year.

I expect the US-listed WJAVF shares to reach $27.72 USD within one year also. WJAVF shares are thinly traded so caution is advised. Buy at the current price.

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By J. Royden WardEditor

Cabot Benjamin Graham Value Investor

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YASKAWA ELECTRIC: WORLD LEADER IN ROBOTICS

Japan’s Yaskawa Electric (YASKY)—the world leader in industrial robotics—is central to one of the 21st century’s key emerging technologies and to the world’s manufacturing growth.

Today, Yaskawa robots can be found on the factory floor, welding and painting, or in electronics manufacturing, where they handle semiconductor chips.

Yaskawa intends to push further into the field of medical robotics, applying the principles of mechatronics to the medical segments. Even drug companies rely on robots because they’re faster and more precise than seasoned lab techs.

And hospitals and nursing homes already use robots, especially in Japan, where there’s a labor shortage. Yaskawa says next year it will introduce a robot that will move a bedridden person to a wheelchair.

Eventually, household robots—those that can clean the carpets and the pool, and even mow the lawn and watch the dog—will become more common.

But it’s still industrial robots that drive the market. The typical industrial robot sells for $100,000 to $200,000 including software.

The estimated total market for industrial robots and associated equipment was at $25 billion in 2011; the Japanese government believes it will reach $70 billion by 2025.

For the year to March 2016, Yaskawa projects sales to increase 9% and operating income 16%, although net income, which rose 46% in the year to March 2015, is expected to be flat.

The company plans to expand its robot centers worldwide from 31 to 38, launch a third robot factory in September of this year, and develop a new robot product line for 2016.

Yaskawa trades at 17 times earnings; the stock should be purchased in taxable accounts to take advantage of the tax treaty between the United States and Japan that affects dividends.

At this reasonable valuation, the stock represents an excellent stake in our undoubtedly robotic future.

Yaskawa Electric was founded in 1915 and its principal business for many years was motion-control systems, a subsector of automation. Now, robotics provide about a third of the company’s sales and operating income.

Yaskawa’s leadership in robotics alone makes it an enticing investment, but the company also has ambitious and achievable goals, other automation businesses, and a reasonable valuation. Buy up to $40.

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By Martin HutchinsonEditor

Pacific Wealth

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