Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

How I Earned 455.2% With This Income Stock

By StreetAuthority Stock MarketsApr 26, 2012 04:21AM ET
www.investing.com/analysis/how-i-earned-455.2-with-this-income-stock-121373
How I Earned 455.2% With This Income Stock
By StreetAuthority   |  Apr 26, 2012 04:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
It's been just a few years that I've held the stock... but it has already become the biggest winner for my premium High-Yield International advisory.

So far it's returned 455.2%... and I still hold the stock in my newsletter's portfolio.

But telling you what a stock has already done isn't going to make you a better investor... or make you money. That's why I want to tell you why it's been so successful. This way you can find similar investments of your own, buy them, and hopefully make triple-digit profits as well.
 
So what has caused this stock -- Companhia de Bebidas Das Americas, better known as Ambev (NYSE: ABV) -- to become one of my portfolio's biggest winners?
 
First and foremost, plenty of the 450%-plus return comes from dividends. Since the stock was added to the portfolio, it's earned $3.23 per share in dividends -- about 39% of the original purchase price. But the vast majority of its gain has come from a rising share price.
 
The stock was first added to my portfolio at a split-adjusted $8.23 per share. Today, it trades at $43.17. Take a look...
ABV CHART
ABV CHART

The company's business couldn't be simpler -- it distributes beer and soda in Brazil and throughout South America. It's the fourth-largest beer producer in the world.

A business doesn't need to complex to make money for its investors. What's important is that a company dominates its market, is essential to day-to-day life, and that it continually rewards its shareholders with dividends or share buybacks.
 
I've already mentioned the company's dividends, which have increased 226% since 2007. And there's no doubt Ambev dominates its South American market. In Brazil alone, where it holds a 69% market share, Ambev's beer is sold in 1 million stores and restaurants. And I think everyone agrees that beer and soda are staples of modern life.
 
However, there are plenty of companies and stocks that meet these criteria... and that make great investments. But these stocks don't all gain nearly 500% in a matter of a few years. Ambev has seen such an amazing return thanks to its growth.
 
In the past five years, sales have grown 60% and profits have risen 257%. That's led to the surge in the share price. In addition to the more than 450% the stock has returned during the past few years, it's also up more than 1,600% in the past decade.
 
This growth comes from Ambev's focus on one of the world's fastest-growing regions. And time and time again, we're seeing the world's strongest growth stories come from international companies.
 
Put simply, the world's growth is in international markets. And today's investors must invest in foreign markets, or risk missing what I believe are the greatest investment opportunities on Earth.
 
The United States is unlike any other nation on the planet. It's the largest economy. It's home to some of the world's most innovative entrepreneurs. But the simple fact is that the headiest days of our growth are behind us. It's simply the law of large numbers.
 
In an economy with a gross domestic product (GDP) of nearly $15 trillion, growing more than a few percent each year is a major undertaking.
 
Think back on what we've seen during the past few years. The U.S. government has spent trillions in an effort to stimulate the economy. The Federal Reserve has spent trillions more. Interest rates have been slashed to zero.
 
And yet, the U.S. economy grew a meager 2.8% in 2011. Not bad, but nowhere near the top of the list when it comes to GDP growth.
 
Qatar topped this list with 17.0% growth. Panama saw a 7.4% rise in GDP... South Korea, 4.5%... Poland, 3.8%... Chile, 5.9%... and Brazil has nearly doubled its GDP in the past five years.
 
And this it to say nothing of the generally higher yields found abroad. Brazil's average dividend yield is roughly 3.5% -- compared with about 2.0% here in the United States.
 
Don't get me wrong. Investing abroad isn't guaranteed to make you money. But if you're ignoring what can be found abroad, there's no doubt you're missing some of the world's best opportunities.

by Paul Tracy
How I Earned 455.2% With This Income Stock
 

Related Articles

How I Earned 455.2% With This Income Stock

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email