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A Great Call on Southern Copper

Does anybody need to be reminded why Wall Street's been panicky lately? The housing market is in tatters, credit markets are seizing, the dollar is plummeting, and stock markets have been looking sickly. Most observers believe we've entered a slowdown, if not a recession, and there are some that think it could get far worse still.

The market hasn't been without its winners, though. Agriculture has been on a tear. Oil has been unstoppable, and coal hasn't been far behind. Gold and other metals have been on a similarly impressive run. And as a result, the companies in these industries have brought some great returns to their investors -- particularly metals magnate Southern Copper (NYSE: PCU  ) .

More than 2,800 CAPS players are bullish on Southern Copper, but none has benefited from its rise better than TheGMaster. This CAPS All-Star gave Southern Copper a thumbs up back in mid-June 2006, and has netted 232 points in total from the company.

TheGMaster is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and he has managed a stock-picking accuracy of more than 50% on his picks while racking up 860 points. Southern Copper hasn't been his only great call. Here's a look at a few of his other prescient picks:


Date Picked



CAPS Rating (5 max)

Intuitive Surgical (NASDAQ:ISRG)










BHP Billiton (NYSE:BHP)





Data from CAPS.

So what is this investor looking at these days? Here are a few of his most recent calls on CAPS:


Date Picked


CAPS Rating

IPG Photonics




Allied Irish Banks (NYSE:AIB)




Telefonica (NYSE:TEF)




Data from CAPS.

While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at crowd favorite Telefonica.

Dialing for dividends
Investors seeking yield face a tough crowd in the fixed income markets. Short-term government paper in the U.S. is less than 3% and LIBOR is hovering right around 3%. Meanwhile, with the credit markets hurting, some products have lost considerable liquidity -- particularly when you start looking at higher-yielding paper.

For investors looking for current income, dividend stocks could be a good place to turn. Right now, plenty of dividend-paying stocks have been beaten down far enough to offer great yields. Thornburg Mortgage (NYSE: TMA  ) , for example, is now listed on Yahoo!Finance as yielding more than 10%. Of course, that yield is only as good as the expectation that it will actually be paid out, and a lot of companies, Thornburg included, rightfully deserve big question marks around their dividends.

At its current yield of 2.8%, Telefonica may not offer a sky-high dividend, but it provides a far more solid business, and a lot more certainty behind its payouts. In addition, it offers the potential for continued capital gains to juice its returns. Over the past year, Telefonica's stock is up 40%, and the company may still have more to come. In its recently announced 2007 results, its operating income leapt 42% for the year. Better still, the company projected further operating income growth of 13% to 19% in the coming year, boosted its dividend, and announced a 100-million-share buyback program.

On CAPS, Telefonica bull xfranco4bcn shared a few more reasons to check out the company:

Telefonica is improving profitability in all areas of business ... once it has divested its non-telecom operations... Beginning 2008 [the company will] ... merge its mobile and fixed sales force in Spain and Latin America which prepares them to continue their positive trend even if a recession is confirmed. Additionally, they are partnering with China Netcom to develop the Chinese market opportunity.

So what's your take on Telefonica? Get in the action by clicking over to CAPS. CAPS is absolutely free, with more than 85,000 stock pickers chipping in to find the best equities on the market.

More CAPS Foolishness:

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Related Tickers

2/16/2010 4:00 PM
PCU $31.38 Down +0.00 +0.00%
Southern Copper CAPS Rating: ****
TEF $9.96 Down -0.04 +0.00%
Telefonica CAPS Rating: ****
AAPL $115.59 Down -2.66 +0.00%
Apple CAPS Rating: ****
AIBYY $0.00 Down +0.00 +0.00%
Allied Irish Banks CAPS Rating: ***
BHP $35.25 Down -0.46 +0.00%
BHP Billiton CAPS Rating: ***
ISRG $665.72 Down -13.78 +0.00%
Intuitive Surgical CAPS Rating: ****
TMA $0.24 Down +0.00 +0.00%
Thornburg Mortgage CAPS Rating: *