As it is the end of the year for mutual funds, many funds have been dumping their losers to take tax loses and loading up on the big movers to "window dress" and make their portfolios look better. This has created a situation where there are many bargains in the market.
This morning I purchased additional shares in Cemex SA (CX). The stock was recently trading at one-year lows on concern over the US housing market. In reality this company is a global cement play that is doing very well in emerging markets outside of the US. This company has very strong cash flow that will be only slightly affected by the weakness in US housing.
Other good sales are in domestic and foreign banks and brokerage firms that have been trashed by the subprime concerns. Two of my holdings that are down over 20%, but look very attractive and are up today include E*Trade Financial (ETFC) and Allied Irish Banks (AIB).
Real Estate Investment Trusts (REITs) also are looking more attractive with the Federal Reserve having lowered the Fed Funds rate over a week ago, making REIT yields more attractive relative to cash. With construction costs up, those companies with real estate in urban locations on the east coast and west coast where land is in short supply should continue to do well.
Three ideas for today.
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