Wed, Jan 8, 2014|Sean Goldsmith

One of the largest companies you've never heard of...

The best way to invest in blue-chip European stocks...

It's hard to find a cheaper group of stocks today than blue-chip European stocks.

In today's Digest Premium, S&A Editor in Chief Brian Hunt reveals his favorite "one click" way to take advantage of this opportunity...

To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.

One of the largest companies you've never heard of... A dominant energy company for less than three times earnings?... A new deal with China could mean big profits for this firm... Jim Rogers' top idea...

Gazprom is one of the largest companies in the world you've likely never heard of...

The Russian oil giant currently holds 18% of the world's natural gas reserves. It makes up 8% of Russia's GDP.

But those aren't the only reasons our colleague Steve Sjuggerud likes Gazprom (and Russian stocks in general)...

For the past two days in the Digest, we've been telling you why Steve likes certain foreign stocks today. The "Bernanke Asset Bubble" – Steve's belief that the government's easy money policies would cause U.S. stocks to soar – has already begun to play out. The S&P 500 currently trades for 19 times earnings. It's up more than 26% over the last 12 months.

But there's still value in some foreign stocks...

Russian stocks, for example, trade for a price-to-earnings ratio of less than five. And history shows that when Russia gets this cheap, you can make big money. From the April issue of True Wealth...

Russian stocks soared the last time they were this cheap. Our database shows a 328% gain from 2001-2004 and a 167% gain from 2008-2011. We have the potential for a similar move right now.

Second, the dividend yield on Russian stocks is very high. That, too, has only been this high twice in the last 12 years – in 2001 and 2009. Those peaks led to an 83% gain in six months and a 119% gain in 15 months, respectively.

But Gazprom is even cheaper than the average Russian stock. It trades for around 2.5 times earnings. And last year, it paid out around $7 billion in dividends.

On Sunday, the Financial Times reported Gazprom was close to signing a deal to supply gas to China. The deal would mean a huge new customer for the oil giant... and billions more dollars.

Russia and China have been negotiating this deal for years... And this isn't the first time they've been "close to a deal." But S&A Global Contrarian editor Kim Iskyan, an expert on Russian stocks, said he believes there must be some truth behind this for the Financial Times to take notice. In an internal e-mail to colleagues, Kim said...

If (when) it happens, this should be a key long-term driver for Gazprom shares. It would substantially diversify the company's customer base. But more importantly, it would show that Gazprom understands that it is no longer the only game in town [for natural gas], and that it has to be flexible in order to survive.

At today's levels, Gazprom is obscenely cheap. It pays a healthy 4.5% dividend. Its potential gas deal with China is a catalyst for growth. And the macroeconomic environment in Russia is good.

Steve believes we're about to see a central-bank-fueled boom in Russia... just as we've already seen in the U.S. and Japan. More from the April issue of True Wealth...

Russian President Vladimir Putin isn't happy with his central bank...

The country's outgoing central bank chairman Sergei Ignatyev had a problem... He's known as an "independent" central banker – one who doesn't bow to the wishes of his government. He has been committed to protecting Russia from inflation since he took over in 2002. And he's been praised for his handling of the global financial crisis in 2008.

But in Putin's Russia, you can't behave like this...

President Putin wants economic growth, period. And this old fuddy-duddy Ignatyev was more concerned with preventing inflation than following the wishes of Russia's president. So Putin "recommended" Elvira as the replacement.

Elvira, no doubt, will get the job, and she will do what Putin wants. That means interest-rate cuts are likely, as well as other measures to artificially stimulate the Russian economy.

The sequel to Abe's Revenge is happening in Russia... Putin will strong-arm the central bank to artificially create prosperity. (Hey, everyone else is doing it, why shouldn't Russia?) I expect a strong stock market rally in Russia over the next 18 months.

And Steve isn't the only one bullish on Russia. Legendary investor and market contrarian Jim Rogers says Russia is his top idea right now. From the June 3 DailyWealth...

[Russia] is a turnaround for Jim. He says he's been bearish on the country since he first visited it in 1966. And he still thinks the country's president, Vladimir Putin, isn't a model leader. "He grew up in the KGB. He took control in a silent coup with the KGB. And he has been running the place like a KGB thug..."

Jim might not like Putin... But he believes he may be trying to turn his reputation around. And that's good for investors...

"Maybe [Putin] doesn't like being treated as a KGB thug," Rogers says. "He understands there has not been great prosperity in Russia in the past few years... I have the view that international capital is welcome in Russia. And if you go there and you invest, you will find opportunities."

Jim's also excited because he sees Russia as a hated opportunity. Longtime readers know that I LOVE a hated investment. And Jim believes that's what we have today...

"Everybody hates Russia for many good reasons... including me for a long time. That's usually a place that you should look, when people hate a market. And so I am looking."

Jim is looking at all kinds of opportunities in Russia... including stocks, bonds, and currency. For the first time in his life, he's actually excited about what he sees.

We know it's difficult to buy stocks in a politically unstable country like Russia. Rogers called Russian President Vladimir Putin "a KGB thug."

Steve admits this is a "hold your nose and buy" trade. But these types of trades – the ones you make when nobody else is willing to touch them – are often the most profitable.

There is a little-known way to gain exposure to Russia (and stocks like Gazprom) and keep your money in blue-chip foreign stocks in other countries like China and Brazil.

This investment gives you exposure to banks, energy, mining, and other powerhouse sectors in emerging markets. Plus, it's dirt-cheap, trading for less than five times earnings... And it pays a 5% dividend. It's no wonder why Steve calls it "the best investment in the world right now."

You can access Steve's special report – titled "The Best Value of My Entire Career" – with a $39 subscription to True Wealth. And if you decide Steve's research isn't for you within the first four months, we'll give you a 100% refund. Click here to learn more (without sitting through a long promotional video).

New 52-week highs (as of 1/7/14): Activision Blizzard (ATVI), Becton-Dickinson (BDX), Dolby Laboratories (DLB), PowerShares Chinese Yuan Bond Fund (DSUM), Kohlberg Kravis Roberts (KKR), Medtronic (MDT), Marvell Technology (MRVL), ONEOK (OKE), ProShares Ultra Health Care Fund (RXL), Sequoia Fund (SEQUX), Vanguard Natural Resources (VNR), and Zhone Technologies (ZHNE).

Light mailbag today... Please direct your ire and allegations to feedback@stansberryresearch.com.

"Dan's DailyWealth Trader article on Poor Henry while pretty simple is extremely valuable – every bit as valuable as good stock recommendations." – Paid-up subscriber John Silverman

Editor's note: We're glad you liked it, John. That essay was originally part of Dan's May issue of Extreme Value. But the lessons on investing discipline were so valuable and timeless, we wanted to share it with a larger audience. If you missed it, you can read Dan's essay here.

Sean Goldsmith

Miami Beach, Florida

January 8, 2014

The best way to invest in blue-chip European stocks...

In Monday's Digest Premium, I (Brian) briefly mentioned that blue-chip European stocks are cheap.

So what's a good way to invest with this in mind?

True Wealth editor Steve Sjuggerud has found the best idea for regular investors. We recently included the idea in the S&A 16, which is a model portfolio we send out quarterly for our lifetime S&A Alliance members. Here is the excerpt that covered Steve's top European idea...

[A holding in this] quarter's portfolio is the SPDR Euro Stoxx 50 Fund (FEZ). The fund holds European blue-chip stocks like oil giant Total, drugmakers Sanofi and Bayer, and tech firm Siemens. Here's what Steve told True Wealth readers last month...

European blue chips are coming off dividend yields around 3.5%. Based on history, buying near those levels can lead to big gains. On average, 113% gains in just 2.8 years are possible. And it isn't just dividends...

European blue chips are also cheap compared with their own earnings history. Based on next year's earnings estimates, the Euro Stoxx 50 – the index where most of Europe's blue chips trade – is 17% cheaper than its 10-year average price-to-earnings (P/E) ratio. The same is true when we look at the price-to-book (P/B) ratio.

History shows European blue chips have a tendency to soar from these levels. And we have the opportunity to buy these stocks at an 18% discount to their 20-year-average price-to-book value.

If you're looking for cheap stocks, you'll find them in Europe. Sentiment is still negative toward the region... and stocks are cheap.

– Brian Hunt

The best way to invest in blue-chip European stocks...

It's hard to find a cheaper group of stocks today than blue-chip European stocks.

In today's Digest Premium, S&A Editor in Chief Brian Hunt reveals his favorite "one click" way to take advantage of this opportunity...

To continue reading, scroll down or click here.

Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)

As of 01/07/2014

Stock	Symbol	Buy Date	Return	Publication	Editor
Rite Aid 8.5%	767754BU7	02/06/09	674.3%	True Income	Williams
Prestige Brands	PBH	05/13/09	458.3%	Extreme Value	Ferris
Enterprise	EPD	10/15/08	251.5%	The 12% Letter	Dyson
Constellation Brands	STZ	06/02/11	229.2%	Extreme Value	Ferris
Ultra Health Care	RXL	03/17/11	208.2%	True Wealth	Sjuggerud
Altria	MO	11/19/08	183.0%	The 12% Letter	Dyson
GenMark Diagnostics	GNMK	08/04/11	182.1%	Phase 1	Curzio
McDonald's	MCD	11/28/06	171.3%	The 12% Letter	Dyson
Ultra Health Care	RXL	01/04/12	169.1%	True Wealth Sys	Sjuggerud
Fluidigm	FLDM	08/04/11	161.1%	Phase 1	Curzio

Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.

Top 10 Totals

1	True Income	Williams
2	Extreme Value	Ferris
3	The 12% Letter	Dyson
1	True Wealth	Sjuggerud
2	Phase 1	Curzio
1	True Wealth Sys	Sjuggerud

Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)

Investment

Sym

Holding Period

Gain

Publication

Editor

Seabridge Gold	SA	4 years, 73 days	995%	Sjug Conf.	Sjuggerud
ATAC Resources	ATC	313 days	597%	Phase 1	Badiali
JDS Uniphase	JDSU	1 year, 266 days	592%	SIA	Stansberry
Silver Wheaton	SLW	1 year, 185 days	345%	Resource Rpt	Badiali
Jinshan Gold Mines	JIN	290 days	339%	Resource Rpt	Badiali
Medis Tech	MDTL	4 years, 110 days	333%	Diligence	Ferris
ID Biomedical	IDBE	5 years, 38 days	331%	Diligence	Lashmet
Northern Dynasty	NAK	1 year, 343 days	322%	Resource Rpt	Badiali
Texas Instr.	TXN	270 days	301%	SIA	Stansberry
MS63 Saint-Gaudens		5 years, 242 days	273%	True Wealth	Sjuggerud