Telefonica S.A. (TEF)

Everything was working well until Spain imploded. This was followed by a price war with Vodafone (VOD-Q). Cut the dividend and the buy-back and the stock rallied quite substantially. Cash was used to pay down debt. Some Latin American countries have put capital controls in place so they can’t repatriate capital, which is a concern. Longer-term, if they are able to pay down their debt, this is a longer-term growth story. If you want less risk, Deutsche Telecom or Vodafone would be some alternatives. There will be some upside someday with Latin America providing a lot of it.

Looking at the Spanish equity markets, you can make a tremendous amount of return if you are willing to go into places where investors are gun shy. This company has great core capital growth. Had some capital impairment vis-à-vis the country and regulatory environments but longer-term it has some great prospects.

Not a stock that he would be keen on at this time. Dividend has disappeared but he believes it will be coming back. Heavy levels of debt and the Spanish economy is still not in particularly good shape.

(Top Pick Nov 2/11, Down 29.27%) He underestimated the problems in Spain. People are selling the ETFs that have companies in Spain and those EFTs are selling TEF. You need stabilization in Europe for this stock to go up.

Near-term, he would be careful of this stock. Has a lot of South American exposure but part of that is in Argentina where the government has made it very difficult for companies to get their money out. The big problem is their main market, which is Spain which has unemployment at 25%. Until that starts to get a little bit better, he would be very wary.

(A Top Pick Oct 6/11. Down 26.39%.) One of the problems is that it is a big cap company in Spain and Spain has underperformed. Has had a nice little run since August. Once there is stabilization in Europe, which he thinks is coming, these things will do better.

Strapped right now to raise cash to pay down debt. Brazil has slowed down to some degree, which has hurt. Stopped the dividend for the rest of this year and will come back in 2013 with a €.75, which is about half what they were paying this year. Stock has recently started to move because of the Spanish stock market, which has been on fire because of the ECB reaction. In the short run you might want to sell it, which is what his plan is.

(A Top Pick Sept 2/11. Down 16.76%.) Had a nice little run up in the last little while. A cheap company. Cut its dividend which he feels was a smart thing to do. Difficult environment for Spanish companies.

Has been beaten up by being located in Spain where the economy is in freefall. You will have a lot of risk short-term. Across western Europe they have 100 million subscribers and 180 Million in Latin America. If you think Latin America is going to continue to expand then you will get growth in this stock. Within the next 18 months you should see stability in the share price. Once sovereign risks in Spain are resolved it will be a strong buy.