Zacks.com Announces That Jack Adamo Highlights the Following Stocks: Companhia Vale do Rio Doce and BHP Billiton Ltd.

CHICAGO -- Jack Adamo, editor of the Insiders PLUS newsletter, says we should be on firm footing for most of the summer. Read about Companhia Vale do Rio Doce (NYSE:RIO) and BHP Billiton Ltd. (NYSE:BHP). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=84

Highlights from the July 9th Featured Expert column by Jack Adamo include:

FEATURED STOCK

A stock that is really starting to pick up momentum this week is Companhia Vale do Rio Doce (NYSE:RIO), or CVRD for short. The shares jumped 3% Friday when CVRD became the first company majority-owned by Brazilians to ever receive an investment-grade rating from Standard & Poors.

Adamo and his team's purchase of RIO is motivated by the boom in China and the rest of Asia, where the company sells a lot of its output. CVRD is the largest iron ore miner in the world, and the fifth largest mining company overall. It is one of the largest producers of manganese and ferro-alloys, and also mines copper, bauxite, kaolin, potash and aluminum. In addition, it has interests in domestic and foreign steel companies, and owns some transportation facilities in Brazil.

Not resting on its laurels, RIO is partnering with BHP Billiton Ltd. (NYSE:BHP) to bid on a development project for a $500 billion coal deposit in Mongolia, where it will be a relative stone's throw away from the world's largest coal user, China.

Last quarter, CVRD revenues rose 34%. Net earnings per share increased 72%. The company's gross margins were over 43% and net margins were an extraordinary 30%. Higher contracted iron ore prices for 2005 may enable RIO to surpass these results going forward. At 12 times trailing earnings Adamo thinks this company is a fantastic buy. It's selling at a 33% discount to the most conservative estimate of the U.S. market, and growth prospects look much better down there.

Adamo has one reservation about the stock. At some point in the next couple of years, we'll get a recession in China. That will affect not just Chinese stocks, but the whole world - Adamo's current recommendation included. But this is market risk, not company-specific risk, and when a recession appears imminent, Adamo and his team can decide whether to sell or ride it out. In the long term, Adamo believes strong companies in these developing markets will greatly outperform our stock market.

Read Jack Adamo's commentary on the economy as well as his outlook for the summer and discover additional stocks by clicking: http://at.zacks.com/?id=85

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