There is a larger question to ask outside of what may be a domestic growth story and what lies beyond the retirement of its super-star CEO James Skinner.  What about that Latin American version of McDonald’s?  This is where Arcos Dorados Holdings Inc. (NYSE: ARCO) comes into play.  The name translates from Spanish to “Golden Arches” in English.

This stock was already falling this week but the stock is literally getting gutted to a post-IPO low after its earnings report. As of the end of 2011 it operated or franchised some 1,840 McDonald’s-branded restaurants with over 90,000 employees serving approximately 4.3 million customers a day.  You can argue that the weak U.S. jobs data might translate to more weakness in Latin America, but many of the key growth markets in Latin America were already seeing slower growth on their own ahead of the U.S. economic data weakening.

Arcos Dorados reported earnings Friday and showed that first quarter revenues gained 11.5% to $921.6 million but that would have been up 16.6% on a constant currency basis.  The company said that its systemwide comparable sales growth was 11.6%.  Net income fell 28.4% to $25.4 million, due to higher depreciation expense, higher capital spending, higher foreign exchange losses, along with higher tax charges, and lower gains from the sale of property and equipment.

Cash and cash equivalents were $144.3 million and its total financial debt was $540.1 million as of March 31, 2012.  Arcos Dorados added 86 restaurants during the last 12-month period.  It was last month that the company decided to initiate a dividend and that payment would currently come to about 1.6% now that the share price is under $15.00.

The prior post-IPO range was $16.79 to $29.43 and now the stock is down over 50% from its highs.  As of mid-Friday the stock is down about 18% at $14.00 with volume already running over 200% above normal with some 5.1 million shares traded.

Today’s reaction in Arcos Dorados is very confusing on the surface.  This was one super-hot IPO in 2011.  The IPO came out at $17.00 per share, well above the expected range of $13.00 to $15.00 per share and this stock rose more than $4.00 on its debut to only eventually go up to above $29.00 at the peak.  The sell-off sure feels like something worse than beating revenues but missing on earnings is at work.

Yum! Brands, Inc. (NYSE: YUM) has also been soft and the 1.5% drop today to $70.90 is down from an all-time of $74.44.  Yum! has its growth story tied more to China than Latin America.

You might not know that the DJIA was recently at year highs for 2012.  This is one of those days where even the defensive stocks are not holding up well.  Why is “Sell in May and go away!” ringing such a strong bell right now?

JON C. OGG

The results come from a new survey of the eight countries conducted by Japan’s Nikkei BP Consulting. Other top brands in India include Colgate-Palmolive Co. (NYSE: CL) and Coca-Cola Co. (NYSE: KO). In Indonesia, Honda Motor Co. Ltd. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM), and Google Inc. (NASDAQ: GOOG) are among the top five. In Thailand, McDonald’s Corp. (NYSE: MCD) joins Sony, Nokia, and Honda in the top five and in Vietnam the top global brands are Nokia, Honda, Sony, and Google.

Among more developed countries, China’s top global brands are Apple, Microsoft Corp. (NASDAQ: MSFT), Mercedes-Benz, BMW, and Nokia. In Japan, the top five includes Apple, Google, Sony, and Amazon.com Inc. (NASDAQ: AMZN). South Korea’s top five includes Apple, Samsung (OTC: SSNLF.PK), and Nike Inc. (NYSE: NKE). The Taiwanese list includes Apple, Sony, HTC Corp., Google, and Walt Disney Inc. (NYSE: DIS). Yahoo! Inc. shows up in the top ten brands in Japan and Taiwan, but in no other countries.

Some observations:

• Apple is pretty clearly the leading global brand among the more developed countries, although it does not appear among the top ten in the less-developed nations. The issue is whether or not Apple will try to change that by attacking the Indian and Indonesian markets.
• Nokia may be struggling, but the company’s brand power in India and Indonesia, each with a population of more than 1 billion people, suggests that if the Finnish giant can deliver a low-priced smartphone it has a chance to make a big noise in the industry again.
• No US carmaker is among the top ten brands in any of the eight countries. Not a good sign.
• Google does not appear among the top ten brands in China. The company’s troubles with the government have had a punishing effect, and Google may end up writing off China.
• Sony, another company suffering from a variety of ills, continues to be included in the top 10 in 7 of the 8 countries surveyed (only South Korea leaves Sony out). For Sony that could mean that it might have to consider moving its brand down the scale a bit to take advantage of its strength in the less-developed nations.
• Yahoo’s strength in Japan is well-established and may be the most valuable asset the struggling company has.
• The top brands in China include luxury brands like Mercedes and BMW, probably a sign of aspirational consumption as much as the reality of daily life in China. What the inclusion could mean is that other luxury brands could do well, but at the cost of reducing margins in order to grow brand power.

The full study is available here.

Paul Ausick

The venture will operate under the name Solazyme Bunge Produtos Renováveis Ltda. and is expected to have an annual production capacity of 100,000 metric tons of oil. The facility will utilize Solazyme’s renewable tailored oil production technology and will also utilize Bunge’s sugarcane supply and processing capabilities.  The move will allow the production of sustainable tailored triglyceride oils for use in oleochemical and fuel applications in the Brazilian domestic market.

While the exact financial terms of the agreement were not disclosed, it is being treated as a win for Solazyme with a 7.6% gain to $15.40 in the pre-market trading.  Solazyme has a market value of $863 million and this company just came public last summer.

JON C. OGG

Under the long-term agreement, Berjaya Retail Limited is expected to open at least 1,000 franchise locations as franchise developer across the ASEA nations within the first 10 years. Berjaya Retail’s subsidiary in Malaysia, Berjaya RS Sdn. Bhd., expects to open its first RadioShack locations later this year in Kuala Lumpur.

Berjaya Retail Berhad is owned by the major shareholder of Berjaya Corporation, which reported combined revenues of $7.06 billion (USD) across its holdings in fiscal year 2011.  This is the outfit that operates the 7-Eleven and Singer brands that have a combined network of 2,000 stores.

Here is the problem… RadioShack shares just hit yet another 52-week and multi-year low of $6.43 today, but shares are currently up $0.02 at $6.50 on the day.  The 52-week trading range was previously $6.48 to $16.70.

JON C. OGG

Randgold holds the following interests: an 80% controlling interest in the Loulo mine located in western Mali; Morila mine in Mali; 89% controlling interest in the Tongon mine located in the neighboring country of Côte d’Ivoire; 83.25% controlling interest in the Massawa project in Senegal; and 45% interest in the Kibali project, which is located in the Democratic Republic of Congo, as well as a gold deposit at Gounkoto in Mali.

All the company has noted so far about the ‘situation’ in Mali is that it is keeping a close watch on developments there “where elements of the army appear to have mounted a coup attempt.”  The CEO also said the current state of affairs in the country was calm although exact details were unclear.

Further noted, “Randgold was in touch with its sources within the country and would make a statement once it had obtained more clarity on the situation.  In the meantime, he said, operations at Loulo and Gounkoto as well as at the company’s Morila joint venture were running normally.”

These situations are often very volatile and it is impossible to know all of the details from afar.  The Randgold ADRs are down 12% at $90.94 against a 52-week range of $73.10 to $120.73.

JON C. OGG

Gol Linhas Aereas Inteligentes (NYSE: GOL), the airline, is down 4.4% at $7.96 against a 52-week trading range of $5.03 to $14.35.

Petroleo Brasileiro S.A. (NYSE: PBR), or Petrobras, is down 4.6% at $28.26 against a 52-week range of $20.76 to $41.74.

Telefonica Brasil, S.A. (NYSE: VIV) is down 2.5% at $28.85 against a 52-week range of $22.81 to $32.14.

VALE S.A. (NYSE: VALE) is down 6.1% at $23.23 against a 52-week range of $20.46 to $34.74.

iShares MSCI Brazil Index Fund (NYSE: EWZ) is down 3.5% at $66.58 against a 52-week range of $49.25 to $80.23.

Brazil currently has a currency stronger than it can handle and it needs to cut interest rates as well.  Other stimulative measures need to come after that, as well as tax reform.

JON C. OGG

The iShares Emerging Markets Dividend Index Fund (NYSE: DVYE) seeks investment results which track the price and yield performance, before fees and expenses, of the Dow Jones Emerging Markets Select Dividend Index.

iShares Asia/Pacific Dividend 30 Index Fund (NYSE: DVYA) seeks investment results which correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Asia/Pacific Select Dividend 30 Index.

These launched with 100,000 shares each and they are expected to grow through time if you track the other emerging market ETF products that are already in existence.

These are not the only emerging market and international dividend ETFs out there.  Investors already have the SPDR S&P Emerging Markets Dividend ETF (NYSE: EDIV) with $300 million in assets.  There is also the  WisdomTree Emerging Markets High Yielding Equity (NYSE: DEM) has more than $2 billion in assets.

There is also the WisdomTree Emerging Markets SmallCap Dividend ETF (NYSE: DGS) with more than $800 million in assets, but that targets small caps in emerging markets.

JON C. OGG

Belgium LT IDR downgraded to ‘AA’ from ‘AA+’; Negative Outlook; ST IDR  affirmed at ‘F1+’: iShares MSCI Belgium Index Fund (NYSE: EWK) is still up 0.4% at $11.33; 52-week range $10.23 to $15.65.

Ireland LT IDR affirmed at ‘BBB+’; Negative Outlook; ST IDR affirmed at ‘F2′:  Bank of Ireland (NYSE: IRE) down 1.6% at $6.15; 52-week range of $3.99 to $27.00 (adjusted for reverse split). MSCI Ireland Capped Investable (NYSE: EIRL) is down 1.5% at $20.17; 52-week range is $16.78 to $23.80. The Irish Investment Fund, Inc. (NYSE: IRL) is still up almost 1% at $7.22 and its 52-week range is $6.49 to $8.77.

Italy LT IDR downgraded to ‘A-’ from ‘A+’; Negative Outlook; ST IDR downgraded to ‘F2′ from ‘F1′: iShares MSCI Italy Index Fund (NYSE: EWI) is down 0.8% at $12.92; 52-week range is $10.88 to $20.15. Telecom Italia S.P.A. (NYSE: TI) is flat at $10.33 an dthe 52-week range is $9.74 to $16.04.

Spain LT IDR downgraded ‘A’ from ‘AA-’; Negative Outlook; ST IDR downgraded to ‘F1′ from ‘F1+’: iShares MSCI Spain Index Fund (NYSE: EWP) is still up 0.4% at $31.44 against a 52-week range of $28.53 to $45.99. Banco Santander, S.A. (NYSE: STD) is still up 0.7% at $8.16 against a 52-week range of $6.77 to $12.72.

Two more downgrades were issued:

• Cyprus LT IDR downgraded to ‘BBB-’ from ‘BBB’; Negative Outlook; ST IDR affirmed at ‘F3′
• Slovenia LT IDR downgraded to ‘A’ from ‘AA-’; Negative Outlook; ST IDR downgraded to ‘F1′ from ‘F1+’

Should this have really been a surprise?  If so, these would be performing far worse.

JON C. OGG

As we noted this morning, “The company said that fourth quarter pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has posted a pre-tax operating profit for 10 consecutive quarters. Revenue for the period was $34.6 billion up $2.1 from the year before’s quarter.”

Asia seems like a spot where Ford should not be weak on the surface, but again that was explained a in recent weeks (when CNBC accidentally called for a loss at Ford rather than a loss in operations in much of Asia due to the ongoing Thai flood issues). 

Our question is simple.  Can the dividend save Ford?  Ford was originally expected to reinstate its dividend at some point this year or even in 2013.  Unlike General Motors Co. (NYSE: GM), Ford is not under government restriction and it does not owe any bailout funds back to Uncle Sam.

New investors entering today will get a dividend yield of 1.5% now that shares are down 3.5% at $12.30.  Shares are still up handily in 2012 after closing at $10.76 on December 30.

The next boost is the coming replacement cycle here in the United States.  Maybe this is not as large of a growth market as Asia and Latin America, but the drastic age of the U.S. car fleet owned by Joe Public is the oldest it has been in our lives.  People can keep pouring a few hundred dollars here and a few hundred dollars there every few months to keep a clunker from clunking out, but eventually it is just cheaper to buy a new a car.

As long as the economy doesn’t fall apart rapidly, Ford’s dividend, the recovery after the Thai flooding, and the U.S. replacement cycle should all help Ford shareholders.

JON C. OGG

As far as how this is impacting closed-end funds and ETFs, the moves are below and the 52-week ranges have been offered so that investors can see just how much pain has been there in the last year:

WisdomTree India Earnings (NYSE: EPI) is up 0.9% at $17.93 and the 52-week trading range is $15.44 to $25.58. 

PowerShares India (NYSE: PIN) is up 0.8% at $18.30 and the 52-week range is $15.96 to $24.59.

India Fund, Inc. (NYSE: IFN) is up 0.4% at $21.46 and the 52-week trading range is $18.61 to $33.99. 

Morgan Stanley India Investment Fund, Inc. (NYSE: IIF) is up 0.7% at $15.75 and the 52-week trading range is $13.59 to $24.57.

These are no ETFs nor closed-end funds but there are some key ARDs to watch:

Infosys Limited (NASDAQ: INFY) was recently butchered on its earnings and revenue warnings and shares are only up marginally at $52.00 versus a 52-week range of $46.12 to $74.52.

Tata Motors Ltd. (NYSE: TTM) is up 2.2% at $21.18 versus a 52-week range of $14.33 to $29.06.

ICICI Bank Limited (NYSE: IBN) is up only 0.25% at $30.95 against a 52-week range of $24.14 to $51.50.

Sterlite Industries (India) Limited (NYSE: SLT), which operates as a non-ferrous metals and mining company, is up 1% at $8.67 versus a 52-week range of $6.64 to $16.60.

$35 billion might not sound like much when you consider the U.S.-sized stimulus packages and when you consider that India has almost 1.2 billion people versus about 310 million in the U.S.  The 2010 GDP on a purchasing power parity was put at about $4.06 trillion and that comes to only about $3,500 in GDP per capita.

$35 billion matters, even if it is going to take more to jumpstart the economy after months and months of tightening and restive monetary measures as the nation fought inflation at the expense of growth.

JON C. OGG