Outside of the ETF investing, this story becomes one where stocks may still have great growth prospects.  But if you are a value investor or one who does not like to chase stocks when they are close to yearly or all-time highs, then there is a problem.  So many of these stocks are hitting highs or are so close that you have to wonder just how much upside is there.  Using 52-week highs and all-time highs is of course not the only metric for valuations, but you might be surprised as you read through a summary of the major Brazilian stock performances on Friday alone.  Throw in the Brazilian Real currency versus the US Dollar component as these are all ADRs and it adds in yet another element.

Banco Bradesco S.A. (NYSE: BBD) is the huge Brazilian bank and its shares rose 1.8% at $19.94, with a 52-week trading range of $7.40 to $20.20 and an all-time high north of $24.00.

Brasil Telecom Participacoes S.A (NYSE: BRP) is a telecom player in Brazil and its shares rose 2.9% to $52.33, with a 52-week trading range of $22.00 to $53.49 with highs in 2007 and 2008 hitting north of $80.00.

Brasil Telecom S.A. (NYSE: BTM) is a telecommunications services provider whose shares rose 3.3% to $26.28 and its 52-week trading range is $9.49 to $26.55 and it was in the mid-$30′s in early 2008.

Braskem S.A. (NYSE: BAK), an integrated petrochemical cracker and thermoplastics producer, rose 0.66% to $12.28 and its 52-week trading range is $3.64 to $13.06, with all-time highs hitting north of $25 back in 2004.

BRF – Brasil Foods S.A. (NYSE: PDA), a poultry, pork, beef cuts, milk, dairy products, and processed food producer, was up 0.8% at $51.50.  Its 52-week trading range is $20.86 to $54.83 and its all-time high was barely north of $60 in early-2008.

Centrais Electricas Brasileiras S.A. (NYSE: EBR), the electric power producer, rose over 3% to $15.43.  Its 52-week trading range is $9.21 to $16.76 and data only goes back under one-year since its IPO.

Companhia de Bebidas Das Americas (NYSE: ABV), or AMBEV, in the beer, draft beer, malt, carbonated soft drinks, and other non-alcoholic space, rose 1.1% to $84.16.  Its 52-week trading range is $30.06 to $84.41 and this is effectively at all-time highs.

Companhia Paranaense de Energia (NYSE: ELP), or COPEL, the electric producer, rose 1.3% to $17.56 and its 52-week trading range is $7.80 to $17.71.  It came within a penny of a 52-week high during Friday’s session and briefly traded north of $20.00 in 2008.

Companhia Siderurgica Nacional (NYSE: SID), the integrated steel producer, rose 2.1% to $30.10 and the 52-week trading range is $7.87 to $31.06 and the high after its early 2008 trading was right at $50.00.

CPFL Energia S.A. (NYSE: CPL), an electric energy producer, rose 1.6% to $54.15 and its 52-week trading range is $34.93 to $57.59 and its all-time highs were over $75.00 in mid-2008.

EMBRAER (NYSE: ERJ), the Brazilian airplane manufacturer, rose 1.3% to $22.57.  Its 52-week trading range is $9.27 to $26.53 and its all-time high was just over $50.00 in mid-to-late 2007.

Gafisa S.A. (NYSE: GFA), the huge Brazilian homebuilder backed by billionaire Sam Zell, rose 5.9% to $30.18… 52-week range is $5.33 to $33.09, all-time highs over $40.00 in the last two-years.

Gerdau S.A. (NYSE: GGB), in the production and sale of steel products, was one of the biggest winners as it rose 4.8% to $13.44. Its 52-week trading range is $4.18 to $14.01 and it was north of $25.00 in mid-2008.

GOL GOL “>Linhas Aéreas Inteligentes S.A. (NYSE: GOL) was somewhat surprising that it was not up more.  The Brazilian airline carrier rose 3.5% to $10.25 and its 52-week trading range was $2.78 to $11.53, yet its all-time high back in 2006 was very briefly over $40.00.

Itaú Unibanco Holding SA (NYSE: ITUB), the credit and financial services giant, rose 0.75% to $20.17 and its 52-week high is $20.50.  All-time highs were hit in 2008 in the mid-$20′s.

NET Servicos de Comunicacao S.A (NASDAQ: NETC), a cable TV player, rose 3% to $12.11.  Its 52-week trading range was lifter Friday to $3.88 to $12.27.  Its all-time high appears to be exponentially higher back in the bubble days but more recently this was a $15.00 to $17.00 stock during 2007.

Petroleo Brasileiro (NYSE: PBR), or PETROBRAS, the giant integrated oil player, is going to trade independently from any Olympics plays even if it is the giant of giants.  Shares were up 0.6% at $44.72 and the 52-week trading range is $14.73 to $46.52.  This was north of $70 back when oil was soaring north of $100.00.

TAM S.A. (NYSE: TAM), the passenger and cargo air transportation services carrier, rose 4.6% to $13.44.  Its 52-week trading range is $5.27 to $19.20 and its highs in 2007 were in the mid-$30′s.

Tele Norte Leste Participacoes S.A. (NYSE: TNE), a telecom player, rose 0.77% to $18.27.  Its 52-week trading range is $10.17 to $21.98. Its highs in early 2008 were north of $26.00.

Telecomunicacoes de Sao Paulo S.A. (NYSE: TSP), or TELESP, a fixed-line telecom player, rose 1.2% to $24.74 and its 52-week trading range is $16.75 to $26.11.

VALE S.A. (NYSE: VALE), or the Companhia Vale do Rio Doce, the diversified metals and mining operator, rose 2.8% to $22.92.  Its 52-week trading range is $8.80 to $23.58 and it traded north of $40 briefly in 2008 when commodities were soaring.

Vivo Participacoes S.A. (NYSE: VIV), a wireless telecom player, rose a sharp 5% to $26.18.  Its 52-week trading range was lifter Friday to $7.76 to $26.44.  Its highs all the back to 2000 were north of $200 briefly and more recently in 2008 it nearly reached $30.00.

Votorantim Celulose e Papel S.A. (NYSE: VCP), a pulp and paper player, rose 2% to $15.94.  Its 52-week trading range is $3.53 to $17.46 and was north of $30 in late-2007 and early-2008.

The world recession did not kill the Brazilian economy as it did elsewhere.  It is effectively energy independent, has favorable business practices for a Latin American country, and has an economy where the middle class still has much perceived upside.  And lifting up the lower-class still offers much room for growth.  If these stocks are truly reflective of the future growth, then the old adage “Brazil is the most promising emerging market out there, and that is the best it will ever be” may be history.  If the bull has life into 2010, it should continue to support Brazil and most BRIC-investment countries.

And if these moves prove to all be too far and too fast, then these are at significant premiums on a relative basis as there many domestic leadership stocks still well under their highs of the last year and longer.  Many investors tried to make the same investment hopes in China in 2008, and many of those bets are still very far under water as the markets dealt with the aftermath of the recession.

Brazil’s estimates population is already almost 200 million, and it has a young population.  The CIA World Factbook shows 66.8% of its population in the 15 to 64 category and 26.7% in the 0 to 14 category, with only 6.4% of its people 65 or older.  Its approximate 2008 GDP was $1.93 trillion, or $1.573 trillion estimated at the official exchange rates.  But the same CIA World Factbook also shows some 31% of the population lived under the poverty line as of 2005.

We actually see much value in some of the neighboring countries, which we plan on comparing for valuation in the coming week.  Keep an eye out for that from us.

JON C. OGG

We just noted this one as one of the huge Window Dressing Stocks that was a large beneficiary of fund buying.  Based upon a $98.00 mid-morning price, since the June 29 date shares are up 47%; but if you go merely one day before the end of the last calendar quarter shares are up a monster 77%.

It is never easy standing against the crowd and it is never easy saying hi-flyers have run too much.  It is possible to stand against the crowd, but stocks have shown time after time how sometimes they will keep rising despite performance and despite valuations.  But it is hard to imagine that there isn’t going to be some profit taking.  RBC Capital Markets just downgraded this Monday saying R-I-M was hard to see higher prices for the time being.  The average target is roughly $100 now, although there are higher targets.   Jim Cramer said recently that he expects some profit taking in these names that are up big, mostly from his "New Four Horsemen of Tech" stocks.

The BlackBerry is still more business-focused, but what we are rally trying to look at is how large the global total is that the company can take.  It has leaped over the Palm Treo from Palm Inc. (NASDAQ:PALM) and the iPhone, for now at least, has been less of a business focus and is still in the the very early stages of its 20 million unit target where R-I-M is trying to counter the advance.

We would expect some profit taking as the obvious move, but we aren’t going to try stand in front of a freight train.  This one has just had way too many gap-ups on earnings before.   With new versions of its PDA smartphones having hit the market, we aren’t going to try to outguess the guestimates for shipments and subscribers.  We are still trying to factor in a longer-term estimate of the total global market opportunity for R-I-M and we aren’t alone. 

The $55 Billion market cap sounds giant, but it depends upon how you view its global opportunity in the years ahead.  Another wild card today will be the impact that the weak US Dollar had.  Research in Motion is based in Canada, derives much of its sales in the U.S., and now has global sales with most major global wireless carriers.

Jon C. Ogg
October 4, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and does not own securities in the companies he covers.