Seeking Alpha: CRE Playing The Long Game In China, And Looks Significantly Undervalued

Investors know all too well how challenging it can be to generate long-term gains from Chinese equities. Leaving aside those companies that play fast and loose with accounting or pin their hopes on favored relationships with government officials, there are the rapidly-changing economic trends that may make long-term forecasting even more challenging.

All of that said, I think investors should give serious consideration to China Resources Enterprise (CRHKY.PK). While CRE carries the black mark against it of being a state-owned enterprise, the company has emerged as a leading retailer and brewer in this fast-growing economy, and is looking to invest more in its food processing and beverage businesses.

What's more, the company plays the long game - using JVs and foregoing quick near-term profits to build a larger, more profitable business down the road. All told, I believe a case can be made that CRE shares should appreciate 40% to 50% over the next 12 to 18 months as China recovers and investors return to names leveraged to Chinese consumer spending.

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CRE Playing The Long Game In China, And Looks Significantly Undervalued

Seeking Alpha: CBD - Pure Play On Brazil, But With Demanding Expectations

There's really nothing easy about Companhia Brasileira De Distribuicao (CBD), including the explanation of why the company is called both CBD and Pao de Acucar. While this is the second-largest retailer in all of Latin America, and the largest in Brazil, the company has a convoluted and contentious ownership group at a time when the company really needs to be more focused on improving its asset turnover and returns.

The potential here is indeed very impressive, and CBD is one of the few Brazilian consumer stocks that American retail investors can invest in without going to considerable inconvenience (or accepting significant liquidity risk). That said, the stock already incorporates pretty heady expectations for growth and emerging markets are notoriously volatile.

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CBD - Pure Play On Brazil, But With Demanding Expectations

Investopedia: Home Depot Chooses Profits Over Empire Building

Although not everything that home improvement superstore operator Home Depot (NYSE:HD) has tried worked, management deserves credit for being ready with a quick hook when it seems clear that an idea just isn't going to live up to expectations. That seems to be the case with the company's plans for China, as management has announced that it will be closing its remaining big box stores in China and shifting to a strategy of specialty stores and e-commerce.

Please read more here:
http://www.investopedia.com/stock-analysis/2012/Home-Depot-Chooses-Profits-Over-Empire-Building-HD-BBY-WMT-YUM0918.aspx

Wal-Mart Looks To The Long-Term

Give Wal-Mart (NYSE:WMT) credit, in a financial world obsessed with short-term rewards, this massive retailer is not afraid to make long-term investments. While investors will almost certainly continue to pay much more attention to its expansion in China, Brazil and India, Wal-Mart's proposed acquisition of South Africa's Massmart could pay dividends over the long run. 

The Details of the Deal
There is no finalized deal between the two companies, but Wal-Mart is proposing to pay about $4.2 billion for this retailer. That represents about a 10% premium for a company that had long been trading on expectations of a bid from foreign operators. In fact, Massmart's stock was trading a bit higher than Wal-Mart's proposed price - suggesting that investors expect some sort of higher bid to materialize. 


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http://stocks.investopedia.com/stock-analysis/2010/Wal-Mart-Looks-To-The-Long-Term-WMT-WMMVY-KFT-GIS-UL-TGT0929.aspx